Walnut

Walnut applies a BNPL business model to the healthcare sector. The company partners with healthcare providers, allowing patients to repay bills in 3, 6, 12, or 30-month installments. Walnut does not charge annual, late payment, or prepayment fees from customers, instead it generates revenue through commissions on each transaction and interest charges depending on the size and length of the loan. It approaches healthcare practices with low out-of-pocket collection rates and negotiates discounts in exchange for upfront cash. Hence, practices can increase collection rates even after offering a discount to Walnut. Walnut uses data points from multiple healthcare providers together with patient spending habits in its credit decision-making. 

Walnut targets smaller practices with between one and five physicians that focus on specific areas like dentistry, dermatology, and fertility. The company aims to partner with hospitals to tap a larger part of the market in the future. As of June 2021, its largest customer types are uninsured individuals and those with high-deductible health plans. Walnut reports that its average loan size is around USD 5,000, with more than 500 patient applications adding up to more than USD 4.6 million in transaction volume YTD 2021. 

Walnut raised USD 110 million through a mix of debt (USD 100 million) and equity (USD 10 million) in May 2022 . Gradient Ventures led the equity round, while the debt financing was led by Clear Haven Capital. The fresh funds support Walnut’s ability to originate loans and part of them will be funneled toward expanding its service in the US and growing its headcount to 50 (from 15) by the end of the year.