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Why Inbox Health is the per-fect final investment for our Fund 1

We invested in the 21st, and final, company for Fund 1: Inbox Health.
 
Inbox powers the payment pipe for the healthcare costs that patients directly have to pay. This is a $1 trillion market need.

We led a $3.5m seed prime round to secure 12% of the business and a board seat.

Currently, there is no scale infrastructure in place to facilitate patient pay. Historically, there was no real need for it because we consumer patients ourselves were responsible for such a small portion of the healthcare dollar. This is quickly changing, as more of us are covered under high-deductible healthcare plans (almost 1/3 of all Americans). And all insurance plans broadly are being designed to push more costs onto patients in the form of higher co-pays and co-insurance maxes.

Inbox's software smartly serves the billing service providers who have doctor offices as their underlying customers, a more scaleable distribution strategy than targeting doctors as customers directly. This affords them a powerful force multiplier to unlock 15-25x the number of underlying doctor offices per each biller. That's formidable leverage in quickly acquiring patient invoice volume.

In the broader market, we’ve seen significant M&A activity as both healthcare endemics and multivertical players see the potential to sit in the payment stream of $1 trillion consumer dollars and take advantage of the derivative credit financing opportunities, e.g., JP Morgan’s $500 million acquisition of Instamed, United Healthcare’s $3.2 billion acquisition of Equian. There is a clear and behemoth second-order opportunity beyond powering the payment pipe -- providing healthcare-appropriate credit and financing products. Doctors and hospitals (the majority of which are non-profits) will not stand for regular consumer loan products with usurious terms.

In many ways, Inbox Health is the perfect capstone to our Fund 1:

  • Sits within an established focus theme of ours: payment and credit tech
  • Is a real business at $1.8m revenue run-rate (3x'ed in past year)
  • Proactively sourced (tracking for 16+ mos, since Fall 2018)
  • We led the round to secure double-digit ownership (12.1%) and a board seat

We invited two funds with non-overlapping, follow-on venture ecosystems to join us: Commerce Ventures (payment tech fund) and Collaborative Fund (generalist tech fund).

We are thrilled to partner with Blake and team to tackle this massive opportunity. They bring product-first empathy and distribution chops to eliminate the frustrating opacity and friction from the patient payment workflow. The team's on a non-stop mission to revolutionize the healthcare billing experience for every one of us.

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