Waystar is attempting to build its software business by simplifying a complex web of payments for healthcare providers and patients. 

“Our software helps providers get paid faster, accurately, and more efficiently, while ensuring patients receive a modern, transparent, and consumer-friendly financial experience,” the company contended in the filing.

The company said it currently caters to all kinds of healthcare providers, including hospitals, doctor groups, clinics, surgery centers and labs. While it currently has 30,000 clients, it said those customers include about “one million distinct providers.” About 1,080 of those healthcare providers generate more than $100,000 on an annual basis, according to the filing.

Nonetheless, the company says it has only captured 3% of the hospital segment of the industry and 7% of the ambulatory practice segment, with other segments untouched, and “ample white space” for growth, according to the filing.

Waystar is attempting to capitalize on the burgeoning U.S. healthcare industry at a time when providers are increasingly looking to tap technology to streamline the administrative side of their business.

“With advances in technology infrastructure and cloud-based software, as well as increased interoperability between systems, providers are increasingly utilizing automated software solutions to further enhance efficiency,” Waystar said in the filing. “We believe the healthcare payments workflow is currently undergoing such an evolution, and that Waystar is well-positioned to benefit from providers gravitating towards more modern, software-oriented solutions.”

Providers and patients have been gravitating toward simplifying and speeding up payments for years. Nacha, the automated clearing house for payments, has charted an escalation of digital healthcare payments over the past decade, showing a leap from 19 million electronic fund transfers to 488 million last year. 

Waystar noted there is plenty of competition in the sphere. Indeed, other companies have been seeking to shift into the market for embedding payments software in healthcare processes.

One of those companies is JPMorgan Chase, the largest U.S. bank. JPMorgan has been drilling into the healthcare payments market for several years, including with the purchase in 2019 of the healthcare payments technology business InstaMed in 2019.

Waystar itself is the result of the merger of Navicure and ZirMed in 2018. While the company may pursue additional acquisitions, it said it plans to use about $1 billion proceeds from the first-time stock offering to pay down debt. The date for the IPO hasn’t been determined.

By Lynne Marek on June 6, 2024
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