This article by Andy Blye originally appeared in the Phoenix Business Journal.

Health scares have a way of reorienting priorities, a phenomenon many have experienced during the Covid-19 pandemic. For Drew Mercer, that reorienting event happened when he was diagnosed with testicular cancer in 2018.

“When you get a cancer diagnosis, you immediately think you’re going to die,” Mercer said. “I’ve always had this fire in my belly to do something entrepreneurial, I just didn’t have the idea, the money, the resources to go out and do it. And so the cancer put that in perspective.”

Just weeks after the diagnosis, Mercer and his wife welcomed their third child. The confluence of these events, and the stack of paper medical bills, inspired him to take a chance.

“Between those two events, we received a couple dozen mailed paper statements to our house and on top of a very emotional season of cancer and adding a new human to the house, it just was straight chaos trying to manage all those bills,” he said. “From a high level with what PayGround is, we are here to solve that problem.”

Mercer left his corporate job to co-found PayGround, a payments platform for health care providers based in Gilbert. Mercer, the company’s CEO, said the current landscape for medical payments is fractious and antiquated, with around 100 different billing systems for providers to choose from.

Each provider, from major hospitals to small specialty offices, has its own payment flow, which means patients end up with lots of different bill-paying experiences, from paying bills over the phone to managing several patient portal logins. Playground aims to consolidate the chaos.

“We really are looking to become that payment solution for all of health care, so patients have one app, one place to pay all their medical bills,” he said.

Adding customers

The company has 100 customers, and it reports that these customers have increased revenue by an average of 23% and decreased collection turnaround time by more than 60%.

The company recently raised $4 million in new funding and plans on making big waves in the state later this year.

Mercer, whose cancer is in remission now, had never run his own business prior to PayGround. His previous experience was in corporate roles at GE Healthcare, Davita, a major dialysis provider, and most recently at Experian, the credit reporting agency, working with hospitals.

Mercer said he has learned a lot since PayGround’s founding in 2018 — like the importance of building a team that shores up his weaknesses — but seeking venture capital funding may have been the most tedious learning process.

“I knew that if we just bootstrap this, we would take us way too long to scale to a point to where I think we get past up from a competitive perspective,” he said. “Especially in Arizona, it’s tough to get introduced to VC funds, because most VC funds sit on each side of the coast.”

More hiring

Mercer’s Rolodex was light on VC contacts so the company ended up utilizing a service that provided introductions to various firms. Mercer said they wanted to find a partner with relevant expertise and that search took over a year.

“You’re balancing running a business with having all of these VC discussions, and it ends up taking a majority of your time and you just want to be building your business. But you can’t just do that without funding, so it’s definitely a balancing act.”

After starting its search in February 2020 (what Mercer sarcastically called a “very fun” time for this major undertaking), they eventually paired with Triventures and SixThirty, venture firms that specialize in health care and fintech respectively.

This seed round closed last month and PayGround has been growing as a result. The company hired five people since the beginning of March, and its total headcount will reach 14 by the end of April.

Many of these new employees will work on the company’s software, where Mercer said the majority of the funding would be deployed to bring the platform to maturity. The money will also be used for marketing and sales in an effort to acquire more customers in the coming months.

He said more details could be shared publicly later in the year, but he has high expectations for the company and its impact in the state.

“PayGround is something that’s going to be a household name in this market by the end of 2021,” he said. “This is going to be a meaningful and purposeful application for individuals and families throughout Arizona this year.”