Investing in Lynx
Authors: Vic Lanio and Tara Sullivan
We are thrilled to lead Lynx’s Series A financing alongside new investors CVS Health Ventures, McKesson Ventures, and our returning friends at .406 Ventures, Obvious Ventures, and Frist Cressey Ventures.
At Flare Capital, we embrace entrepreneurs who look to transform the business of healthcare in profound ways. We believe that the most successful companies are built at the junction of several key elements — a world-class and domain-experienced team, a large addressable market ripe for disruption, an ability to meaningfully reduce clinical or administrative overhead.
When we met Matt, Ken, Joe, and the rest of the Lynx team, we quickly came to appreciate that they are building with these key ingredients at the center of important trends and momentum in the market:
- Healthcare expenses continue to rise, and consumers are increasingly directing their own spend
2. Current healthcare payment technologies are antiquated and inflexible
3. Lynx offers a single modern platform across all healthcare payment types
4. The Lynx team has the know-how and vision to innovate at scale
Now, let’s dive in…
Healthcare expenses continue to rise, and consumers are increasingly directing their own spend
Americans are experiencing higher healthcare expenses than ever before; the average family insurance deductible stood at around $3,800 in 2022, up 52% from $2,500 in 2013 (KFF). With a rising cost burden, demand is rising for consumer-directed healthcare accounts that enable more efficient spending via pre-tax dollars (e.g., FSA, HSA, HRA, ICHRA). There are now >100 million issued debit cards and accounts in this category, representing over $100B in annual spending. CMS projects that Medicare beneficiaries’ out-of-pocket spending growth rate will average 4.7% during 2023–2032. Recent legislation has also made way for innovative insurance solutions that offer employers and employees more flexibility. For example, ICHRA (Individual Coverage Health Reimbursement Arrangements) drives >$2 billion in annual spending and is becoming an increasingly important model.
Current healthcare payment technologies are antiquated and inflexible
In parallel with the rise of consumer-directed healthcare spending, many Americans struggle to navigate their healthcare benefits and spending accounts. Benefits vary widely, can be increasingly complicated to interpret, and available technology wasn’t built with user experience in mind. Legacy payment and banking technologies that support healthcare spend have not kept pace with an evolving landscape. When an employer or insurer wants to enable a new health benefit, incumbent solutions are often unable to provide proper banking capabilities, SKU-level spending controls, and intuitive consumer experience in a flexible and compliant way. Large enterprises offering multiple products (e.g., HSA, ICHRA and Supplemental Benefits) often need to stitch together point solutions.
Lynx offers a single, modern platform across all healthcare payment types
Enter Lynx. Lynx is an API-first fintech platform revolutionizing healthcare payments. The company has built a banking and payment platform that empowers enterprise customers to offer easy-to-use, customized health benefits and accounts. Lynx provides a single API-first platform across all healthcare payment types, making account issuing, card processing, investments, over-the-counter (OTC) and supplemental benefits easier than ever before. With Lynx, customers can launch full HSAs, FSAs, ICHRAs and Supplemental Benefit programs and access real-time data and utilization insights with payment controls in as little as 10 weeks. Today, they are trusted partners to some of the largest incumbent CDH technology platforms, ICHRA administrators, and national health plans.
The Lynx team has the know-how and vision to innovate at scale
Matt, Ken and Joe are deeply experienced leaders in healthcare and financial services. They have overseen and scaled payment infrastructure at some of the largest financial services and healthcare organizations in the world, including Optum, State Street and Fidelity Investments. What is even more impressive is the talent they have attracted and the depth of expertise embedded throughout the company since its earliest days. From the technical to commercial teams, Lynx has hand-picked an all-star team of veterans from legacy incumbents as well as fast-growing technology companies. Lynx has the technical strength and operating culture needed to radically rebuild payments infrastructure from the ground up. We are thrilled to join forces with Lynx to reimagine healthcare payments and help individuals optimize their healthcare spending to live healthier lives. There is a lot of work ahead, and we can’t imagine a stronger team to tackle this challenge.
To learn more about Lynx, please reach out to Vic Lanio (vic@flarecapital.com), Tara Sullivan (tara@flarecapital.com) or anyone else on the Flare Capital team — we’d love to hear from you. You can also view the company’s open roles here.
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