By Amit Chowdhry via Forbes.com
Based in Ann Arbor, Michigan, HealPay was founded by Erick Bzovi and Lancelot Carlson. HealPay started off by developing accounts receivable software. Today their flagship product is known as SettlementApp. SettlementApp is designed for large billers like attorneys, collection agencies, and medical practices that are owed money.
The SettlementApp gives people friendly options to pay their bills over 3 months, 6 months, 12 months, and so forth. HealPay uses data from the past to see what people’s preferences are. HealPay charges a small installation fee and generates revenue from each transaction. HealPay hopes to increase the volume of their transactions in the future so that the installation fee can be eliminated.
Today there are over 750,000 active accounts of people who can log in and make payments through HealPay.
Bzovi told me that HealPay started to develop a new service called Rent Roll three months ago. Bzovi and the HealPay team were inspired by markets with recurring billing. Many landlords, including their own, were still requiring snail-mailed checks every single month. RentRollApp makes it possible for landlords and real estate management companies to collect rent online and through mobile devices.
RentRollApp can set up recurring payments using autopay and the funds can be directly deposited into a landlord’s bank account. Impressed by the service, a property management group that has 350 units in Sterling Heights and Trenton, Michigan recently signed a deal with HealPay
Funding and Growth
HealPay raised seed funding over a year ago with plans to go through a growth round later in the year. The company’s seed investors actually piloted some of HealPay’s software to help iron out kinks. Bzovi believes entrepreneurs should focus more on asking early adopters for investment money and less on so called “Rockstar VCs.”
In the company’s first year, they were not able to provide merchant services. After building relationships with payment processors and banks, HealPay has evolved from a software-as-a-service (SaaS) company to become more transactional.
Companies like Stripe, Dwolla, and Braintree cast a huge net in online payments. Bzovi told me that HealPay is currently focused on “vertical markets” rather than becoming a broad wallet or payment form provider. ”We focus on personalizing the checkout experience and shortening it with less clicks,” said Bzovi.
When I asked Bzovi what some of the challenges with signing up clients are, he told me that the “on-boarding process can be challenging since many clients have legacy systems.” He added that some “businesses are naturally skeptical about the cloud so education is always part of the sale.”
This is why HealPay strives to be PCI and HIPAA compliant. The company takes security of their clients very seriously and keeps an eye on market trends and regulations.
History Of HealPay’s Founders
The founders of HealPay met several years ago while participating in Michigan’s startup community.
Bzovi worked in the real estate industry in Southfield, Michigan after graduating from Michigan State University. Bzovi first got involved in startups after his boss raised around $4 million to launch a hunting tournament similar to the professional bass fishing tournaments on ESPN.
This project ended up failing, but fortunately some of the funding was salvaged. Bzovi, his boss, and another friend used the leftover funding to start an ad network from the ground up called Outdoor Hub. Outdoor Hub rapidly accumulated 300+ websites that focused on the outdoors vertical. Bzovi’s job at Outdoor Hub was to oversee ad operations and ad inventory across the exchanges. In just 3 years, Outdoor Hub grew to 15 employees and hit $5 million in annual revenues.
Through these experiences, Bzovi saw major failure and major success. This is when he decided to take a similar risk of his own.
After working on several startups and his own consultancy in Michigan, Carlson moved to California in 2008. While in California, he joined a music sharing startup. Soon after that failed, he joined Engine Yard where he helped managed the hosting of Ruby on Rails applications. Carlson also wrote a book related to Ruby on Rails programming.
Why Ann Arbor?
I asked Bzovi why he decided to open the company office in Ann Arbor, Michigan versus other cities. He said that he wanted to embed HealPay “in an environment with hackers and hustlers.”
“In Ann Arbor coffee shops, you will overhear people talk about cloud computing and hacking together projects regularly,” he said
He also pointed out how there are great tech organizations in the area like Tech Brewery and MPowered. When running into a technical issue, there are many people in the area to talk to for help.