Austin-based fintech startup First Dollar announced Thursday that it has raised $14 million to make it easier for consumers to pay for HSAs, FSAs and other health benefits.
First Dollar co-founders Jason Bornhorst and Colin Anawaty previously launched healthcare coordination platform Patient IO, which they sold to AthenaHealth in 2016. The duo went on to work for Athena, where they learned about the obstacles patients face when paying for healthcare.
In 2019, Bornhorst and Anawaty founded First Dollar, which now has 24 employees. The startup plans to double its headcount this year with a focus on product, engineering and sales.
Bornhorst, the company’s CEO, told Built In its platform allows consumers to use their HSA, FSA and HRA benefits with a swipe of their First Dollar card, without worrying about multiple cards or scanning receipts for reimbursements.
“What Stripe has done for e-commerce, we’re trying to do for consumer-directed benefits in healthcare,” Bornhorst said.
Whereas most benefit administrators have hard-coded benefits into their software system or benefits card, Bornhorst said its “software-defined benefits” approach allows for multiple types of benefits to be stacked onto one card by simply toggling the configuration settings in their software.
“Ultimately, if we’re successful, the consumer that is buying healthcare should not have to think about what benefit type they’re using,” Bornhorst said. “They just swipe a card, and First Dollar technology routes it to the most appropriate benefit in the backend.”
First Dollar’s early customers include modern, tech-savvy health plans like Bright Health, Sidecar Health, Kind Health and Decent Health. While those startups have used technology to provide a sleek user experience for customers, Bornhorst said they have needed help with integrating HSA, FSA and other consumer-directed benefits provided by legacy companies.
“The old guard of solutions is not compatible with how they aim to run their business,” he said.
In the next year, the company will continue to add functionality for other supplemental benefits, such as stipends for over-the-counter medications and groceries. Bornhorst predicted that the number of supplemental benefits will continue to expand, which will create more of a demand for a unified health wallet like First Dollar.
The Series A round was led by Blue Venture Fund, a collaboration among Blue Cross Blue Shield companies, the Blue Cross Blue Shield Association and Sandbox, to which thirty-five BCBS companies have committed over $890 million across four funds.
Blue Venture Fund is joined in the round by existing investors Next Coast Ventures and Meridian Street Capital. Notable angel investors include Zus Health CEO Jonathan Bush, Everly Health CEO Julia Cheek, Marc Weiser and Sean Joyce.
