44% of Americans would not be able to handle an unexpected $1000 expense according to Bankrate. 20% of these people would charge this type of expense to a credit card and enter a vicious cycle, requiring them to pay onerous amounts of interest over time. 100M people in the US have some form of medical debt. Nibble Health is an employer-sponsored healthcare financing platform provided as an employee benefit that charges zero fees and zero interest, allowing employees to manage large out-of-pocket medical expenses. The stress of debt spillovers over to the workplace and job performance as those with debt burdens tend to get sick more often, have increased absenteeism, and also drive up employer healthcare costs in the long run. By eliminating the financial barrier associated with healthcare, employees are also more likely to also seek out pre-emptive care. The company issues a Nibble Health Card (both physical and virtual) that can be used at any healthcare provider where Visa is accepted.
AlleyWatch caught up with Nibble Health CEO and Cofounder Steven Greene to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
We raised an $8.5M seed round co-led by Wing Venture Capital and Tiger Global Management, with participation from A* Capital and Expa. We were also fortunate to bring on several extraordinary angels from the healthcare and fintech communities.
Tell us about the product or service that Nibble Health offers.
Nibble Health enables leading organizations to provide zero-interest, zero-fee healthcare financing as an employee benefit. Employees can use their Nibble Health card to pay for out-of-pocket healthcare expenses in free installments over time, creating a healthcare safety net that removes financial barriers to care, and companies can lower overall insurance costs while increasing employee satisfaction.
What inspired the start of Nibble Health?
Nibble Health started with a personal experience. Last summer, my wife woke up one morning thinking she was having a heart attack. We went to the ER and after a short stay where the hospital took basic bloodwork, administered a COVID test, and performed a chest CT, we found out she luckily only had a bad case of bacterial pneumonia. We were in the hospital for two hours, did the bare minimum in terms of treatment, and still received a bill a month later for $8,000.
This happens every day in the US at a scale that’s almost hard to imagine. Each year, hundreds of billions of dollars of out-of-pocket bills are sent to Americans, most of whom can’t afford an unexpected $500 medical expense. It discourages people from accessing the healthcare system when they need it. And while financing has become a major part of consumer behavior (very rarely do you go through an e-commerce flow without a prompt to pay in installments), healthcare financing has not evolved in the same way. It’s still predatory and doesn’t live where it can be used most effectively. I have a background in healthcare and financial services and very quickly became focused on answering “could we use fintech to enable people to better access healthcare?” Through an old colleague, I met Phil Markunas, who’s an incredibly talented 0-1 builder (he was initially introduced as “the startup version of a Swiss Army knife”). Phil joined as Cofounder and CTO, and that was the genesis of Nibble Health.
How is Nibble Health different?
Most competitors in the healthcare financing world sell into individual providers, like a dermatologist’s or ophthalmologist’s office, and live at the point of sale. Nibble Health sells into employers, which allows us to both bring enterprise partners into the fold who want to keep their people healthy and reach patients at a completely different time in the healthcare decision-making process.
Our vision isn’t to be a fintech company that happens to be in healthcare. Our vision is to be a healthcare company that runs on fintech rails. What we mean by that is, we don’t think of fintech as the defining category of our business, but rather as the underlying infrastructure upon which we can build a new healthcare operating system that helps patients make better care decisions.
What market does Nibble Health target and how big is it?
We’re tackling the $365B of out-of-pocket medical bills sent to Americans each year.
What’s your business model?
We provide zero-cost healthcare financing to employees, for which employers pay us a fee.
What are your post-COVID office plans?
Most of our team members are onsite at our HQ in Union Square and come in at least a couple of days per week. Given our stage, there’s something immensely valuable about being in the same space casually working through problems out loud (we’ve had a few “aha moments” that likely never would’ve happened if we weren’t sitting together). We’ll continue to prioritize in-person hiring for that reason.
With that said, we want to hire the best people across the country. We’re cognizant of the challenges that come with a hybrid workforce and do our best to be thoughtful around creating a cohesive culture.
What was the funding process like?
We’re addressing a problem that’s unfortunately universal. Almost everyone has a horror story of receiving a surprise bill for a basic procedure. That acute pain point, and the commensurate value our business can unlock, resonated with the venture community. We had also spent time forming relationships with investors before going to market and had demonstrated real product velocity in a short period of time. For those reasons, we were able to raise relatively quickly.
What are the biggest challenges that you faced while raising capital?
It’s not always easy to tell which investors truly help you realize your vision post-raise. We found reference checks and backchannels to be valuable resources, and feel as if we’ve assembled an amazing group of folks who have the experience, wisdom, and commitment to help us achieve our goals. Sizing the round is also always a challenge–we ultimately chose to raise extra capital and take some incremental dilution.
What factors about your business led your investors to write the check?
Nibble Health solves a massive problem in a unique way and provides employers with a solution that delivers outsized ROI when they need it most. We’ve assembled a talented team that’s built to execute our mission and we have an exciting vision for how fintech can change healthcare.
What are the milestones you plan to achieve in the next six months?
We’re focused on providing world-class service to our first cohort of employers and continuing to build our team.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Get creative around how you do “discovery.” Customer insights are among your most prized assets, and there are lots of ways to generate learnings without a huge budget. In the earliest days, we put up ads on Craigslist offering between $10 – $20 for people to talk to us about their experience with healthcare financing or filing for bankruptcy due to medical debt. We ended up fielding ~20 calls over two weeks, which cost us ~$300 and contributed to our product in meaningful ways.
Get creative around how you do “discovery.” Customer insights are among your most prized assets, and there are lots of ways to generate learnings without a huge budget. In the earliest days, we put up ads on Craigslist offering between $10 – $20 for people to talk to us about their experience with healthcare financing or filing for bankruptcy due to medical debt. We ended up fielding ~20 calls over two weeks, which cost us ~$300 and contributed to our product in meaningful ways.
Where do you see the company going now over the near term?
We’ll build a patient-first healthcare payments platform that drives better health outcomes at scale.
What’s your favorite restaurant in the city?
It’s a NY cliche, but I eat Joe’s Pizza at least twice a week!
