Why We Invested in HealNow, the Online Payments Platform for Pharmacies
September 20, 2023
We are pleased to share HealNow has raised $5.5M in seed funding led by Bonfire Ventures, with participation from Walkabout Ventures, ERA, Alabama Futures Fund, Impulsum Ventures, and others. Read their fundraise announcement in Axios.
What is HealNow?
HealNow is an online payments infrastructure platform for pharmacies. The company simplifies transaction processing, delivery management, and communication for pharmacies and, in turn, offers patients a higher quality and frictionless experience to pay for, schedule, and receive their prescriptions and over-the-counter-products. By working directly with credit card companies, regulators, payment networks, and banks, HealNow streamlines the entire KYC and underwriting process for pharmacies. The platform integrates with existing pharmacy management systems (such as PioneerRx, Liberty, and Keycentrix) via API, seamlessly fitting into existing workflows, and offers a white-labeled solution. The company has partnerships with several key healthcare organizations, including Omnicell, NCPA, and APC.
With HealNow, ~75% of patients complete their orders online, improving medication adherence and reducing pharmacy hopping, while pharmacies see a ~30% increase in prescriptions filled and experience cost savings of ~300 hours (the equivalent of two full-time employees).
What problem is HealNow solving?
Despite the pharmaceutical industry processing over $423B in-person or keyed transactions, most online payment processors do not support pharmacies, perceiving it as a high-risk market with bad actors, fraud, and one that is generally not a fit for their purchasing model. While the top pharmacy chains and VC-backed pharmacies have been insulated from this by investing to implement their own modern, online checkouts (which patients have become accustomed to), the rest of the market (namely, independent pharmacies) remains offline.
Building a reliable online payments platform is an expensive and challenging process, as pharmacies are faced with third-party credentialing fees, high risk merchant fees, significant overhead costs, and regulatory complexities – an undertaking requiring resources that such businesses often don’t have to spare. As a result, operations remain inefficient and costly for these pharmacies, and, by extension, dissatisfying for patients.
HealNow is leveling the playing field, offering a modern, white-labeled online payments infrastructure purpose-built for pharmacies that can go live in minutes.
Where did we hear about the company?
We were introduced to Halston Prox (Founder & CEO) through Ed Wilson (Co-Founding Partner, Impulsum Ventures), whom I have known and co-invested with for several years.
Who are HealNow’s customers?
HealNow is a fit for any pharmacy looking to establish a seamless online checkout experience. This spans hospital and LTC pharmacies, compounding and retail pharmacies, specialty and mail order pharmacies, and veterinary pharmacies. Pharmaceuticals remains to be one of the largest industries that is still offline, with 70,000+ pharmacies unable to accept online payments.
Why ultimately did we invest?
HealNow was a very compelling opportunity for us – a SaaS business solving a challenging problem in a large market, a team with founder-market fit, impressive product validation, and clear customer love, all within vertical software – a playbook we know very well.
With several years of experience in healthcare digitizing health records and implementing medical software, Halston Prox (Founder & CEO) brought valuable perspective to this problem and, further, was able to build a strong team of pharma experts around him. This team had reached an important milestone in getting HealNow’s payments system PCI DSS (Payment Card Industry Data Security Standard) compliant – an impressive signal of product validation, particularly given the company’s early stages.
In due diligence, all of this translated to passionate customers who highlighted how critical HealNow is to their businesses.
What’s next for HealNow?
With the new financing, HealNow will focus on accelerating product development and expanding partnerships with other pharmacy service providers to build out the platform. The company also plans to broaden its reach to serve pharmacies of every scale across various sectors such as retail, hospitals, universities, and veterinary practices, among others. We are excited to support Halston in what we believe to be a key inflection point in HealNow’s journey to democratize pharmacy technology at scale.