Newport Beach-based startup Carepoynt LLC, which created an app-centric, incentive-based health platform, has finalized its second notable funding deal in four months.
The company—whose “poynt”-based rewards system is designed to encourage good health and wellness behaviors for its more than 20,000 users—closed a $5 million preferred equity investment this month arranged by San Francisco-based US Capital Global.
The names of the latest investors were undisclosed.
US Capital said in marketing documents that the company was seeking up to 200 investors putting up at least $50,000 each in Carepoynt, which has now raised more than $8.5 million since its 2016 founding.
It raised $2 million in seed funding in July.
About 50 private investors, including Carepoynt founder and Chief Executive Tim Stanley and other employees, had invested about $2.5 million in cash and an additional $1 million in deferred compensation in the company as of this past summer, according to US Capital.
Carepoynt was valued at $15 million before the recent $5 million fundraising efforts, US Capital said.
The company has an extremely ambitious growth plan, according to US Capital’s pitch for the latest investment.
Carepoynt was projected to have $3.2 million in revenue this year, and could take in $31 million next year.
It projects annual revenue of $392 million by the end of 2022, and a gross profit margin of nearly 95%.
The company “anticipates a potential exit through an acquisition by a large healthcare or rewards-based organization” in two to five or more years, or it could opt to go public, the investment firm said.
Local Hires
The company plans to use money from the latest investment for growing product offerings and adding employees, Stanley told the Business Journal.
It will spend “roughly 60% [on] sales and marketing, and customer services [hires],” and the rest will largely go to expanding its online platform, he said.
The company, which has an office in Las Vegas, plans to onboard 25 employees this year, a majority in Orange County, according to Stanley.
It’s still on the lookout for funding opportunities, he said.
“We have the ability to go through [US Capital Global] or independently do deals.”
Stanley didn’t exclude crowdfunding in future efforts.
Rethinking Rewards
Carepoynt wants to drive consumers’ proactivity in managing their own health by giving users redeemable “poynts” for participating in positive health behaviors, such as going to doctors, the gym and spa, as well as buying products at certain health-focused retailers.
The poynts can be redeemed to save money on prescriptions and other medical costs, or can be used at a variety of affiliated retailers and businesses.
Its stated goal is creating “a new connected community marketplace of healthcare and wellness experiences” by aligning the multiple marketplace stakeholders, including health systems, insurers, employers, service providers, and health and wellness retailers.
The program remains a work in progress. Carepoynt is introducing new features and rewards, as well as a more engaging user-experience design, to select members and partners this year.
Additional program features allow users to donate poynts to family, friends and nonprofit groups.
“We are putting technology to work to encourage individuals to jumpstart their journey,” said Stanley.
The recent individual-centric trend was driven by the Affordable Care Act, which has put new emphasis on disease prevention and patient management, particularly for chronic conditions, which account for more than 80% of U.S. healthcare costs, according to the Centers for Disease Control and Prevention.
Partners
Stanley said the company “had a killer second quarter” and continues to amass health systems, products and services partners.
“We have more than 500 partners,” he said, naming brands such as Fitbit, CVS Pharmacy, Amazon, Whole Foods Market and Nike.
The company has more than doubled its members since the start of the year.
The Carepoynt app is available on the Apple App Store and Google Play, and is free of charge for users.
Partners, providers and employers pay the company through a combination of software, transactional and services fees.
Competitors include San Francisco-based Sempre Health, another healthcare-focused loyalty program company, which raised $8 million in August.
