By launching a Visa Business card for doctors, fintech startup Nitra raised $62 million in debt and equity, CEO Jonathan Chen told Axios exclusively.
Why is this important: Healthcare’s outdated payment ecosystem means doctors are heavily reliant on manual labor and accountants to purchase medical supplies and manage office maintenance, reducing the time they spend on patient care.
- “As far as the owner of a small and medium-sized business – or in this case, a doctor running their own clinic – they don’t have access to financial services that cover what they need,” says Ryan Bloomer, partner of K50 Ventures. .
Offer details: Of the total funds, about $16 million is equity funding from Andreessen Horowitz, New Enterprise Associates, Pantera Capital, KB Financial Group, Jerry Yang/AME Cloud Ventures and Will Smith’s Dreamers VC, according to Chen.
- CoVenture provided a $45 million credit facility, he adds.
- The debt-heavy nature of fundraising is a favorable financing structure for cash-intensive corporate credit card companies because equity can be expensive, Chen says.
- Primer Sazze Partners, SparkLabs Taipei and Global, Dunamu, Expa, Soma Capital, Slope Capital, K50 Ventures, 8090 Partners, Comma Capital, Gaingels and Gold House Ventures also joined the round.
And after: Chen says he plans to use current funds to establish Nitra among a few hundred clinics.
- Nitra aims to raise a Series A (size TBD) in a few months, as well as expand its debt facility “to hundreds of millions”.
- Chen sees Nitra as a natural acquirer in the medical supplier space, saying “we’re definitely thinking about the M&A track.”
- “There are many niche businesses targeting specific vendors and this is an avenue we want to explore – buying another business instead of building it ourselves,” he adds.
State of play: Infrastructure-based startups have exploded over the past two years, with companies emerging to handle back-end tasks in healthcare. Possible buyout targets for Nitra could include:
- Heard, a startup that handles accounting, payroll and tax services for therapists in May raised $10 million in Series A funding.
- Tomorrow Health, which contracts with healthcare payers to connect patients with medical providers, raised $60 million in Series B funding in June.
How it will work: Nitra’s first product is a tailor-made Visa Business card for doctors that allows them to earn rewards on things like medical and surgical supplies and office and business maintenance.
- The card’s cash back percentage is 2.2%, Chen said.
- Current partners include healthcare vendors and providers Jaanuu, PatientPop, Betty Mills, DirectShifts, Vitality Health and Dealmed.
💭 Our thought bubble: New York-based Nitra focuses on the expense management trend we’ve seen pioneered by fintech companies like Brex and Ramp, only with physician-friendly features.
- Given Brex’s recent exit from the SME market where many independent doctors operate, Nitra has more scope to scale.
What we are looking at: In the near future, the company plans to roll out a full suite of integrated medical software and supply chain tools for physicians – allowing users to pay bills, do day-to-day accounting, apply for loans and medical equipment insurance and payroll management.
- For now though, “the goal is to get to as many clinics as possible,” Chen said.
Lucinda Shen contributed reporting.