Madison-based fintech Cylerity raises $4M seed to speed health provider payments

Madison-based healthcare fintech Cylerity announced Tuesday that it has raised $4 million in seed equity and secured a debt facility of up to $24 million, as it seeks to shorten the lengthy reimbursement cycle that many providers face.

The company, which says it uses machine learning and AI to assess and advance claims receivables, shared that the HealthX Ventures led an oversubscribed equity round with participation from C2 Ventures, Upstream Ventures, Wisconsin Investment Partners and Tundra Angels. The debt line comes from First Business Bank.

The company’s platform analyzes claims and other clinical and billing data to predict when insurers will pay and how much they will reimburse, then advances funds to providers - Cylerity says as quickly as 24 hours after claim submission. Providers typically wait 45 to 120 days for insurer reimbursement, a lag the company and investors say contributes to cash-flow problems, staffing pressure and deferred technology spending for small and mid-sized practices. “Providers shouldn’t have to wait months to get paid for care they’ve already delivered,” Cylerity founder and CEO Ryan Wheeler said in the statement. “By valuing receivables in real time, we give practices the financial predictability they need to keep operations running smoothly and patients cared for without disruption” he added.

Cylerity says it plans to use the new capital to expand engineering and data science teams and to scale partnerships. These could include banks, clearinghouses, electronic medical record vendors and care organizations nationwide. 

The company, a graduate of the Creative Destruction Labs accelerator, says its integrations with EMRs, claims feeds and bank data are central to its underwriting and anomaly-detection models. Investors and early customers shared their take on the approach as one that addresses a gap distinct from consumer-focused payment models such as buy-now-pay-later products. 

Mark Bakken, Managing Partner at HealthX Ventures, said that they’d seen “firsthand how their platform brings stability to providers and helps them stay focused on patients instead of paperwork by allowing them to get paid within a few days instead of potentially months.”

Ricardo Salas, founder and CEO of Inspire Health Alliance, an early customer, described a rapid benefit during the pandemic-era cash stress where his organization “struggled to cover expanding payroll and keep up with diagnostic supply costs. Cylerity changed that. They gave us access to affordable capital when we needed it most—and ultimately, we became investors ourselves because we believe in what they’re building.”

A number of companies have attempted to speed cash flows for providers through factoring, invoice financing and revenue-cycle management services, to try and counter the slow administrative processing and complex insurer rules of the healthcare industry. Key questions for models like Cylerity’s include the accuracy of payment predictions, the pricing and fees charged to providers, and how risk is allocated between the fintech, lenders and providers if claims are denied or adjusted.

Cylerity’s arrangement combines equity and a sizable debt facility, the latter enabling the company to advance capital at scale. 

As healthcare providers continue to face thin margins and staffing pressures, products like this that can help convert receivables into working capital have an opportunity to gain traction, provided they demonstrate reliable prediction performance and transparent economics.