StrongBox eSolutions Will Consider Capital Raise at End of 2018
StrongBox eSolutions, a venture-backed healthcare revenue cycle management (RCM) company, will consider a capital raise at the end of 2018 with the potential for an exit in two or three years, CEO John O’Connor said.
Logical buyers when the company has achieved more scale include larger RCM providers, he said.
“We’ve had discussions with people who have a more fully integrated RCM software solution, and we’re a piece of that pie,” said O’Connor, speaking on the sidelines of the Predictive Analytics Innovation Summit in Chicago this week. “We have had discussions about integrating with a larger platform.”
O’Connor would not provide current customer or revenue figures, but said StrongBox hopes to add 100 customers in 2018. At some point after that an exit could be possible, but the company is not actively pursuing one now, he said.
As part of any raise, StrongBox would look to hire a law firm that specializes in medtech or fintech with “good contacts and a reputation with fund providers,” O’Connor said. StrongBox does not have a relationship with an investment bank but would consider hiring one to advise on a future funding round, he added.
O’Connor said the size of a raise has not been determined but that fresh funds would be used for product development and sales and marketing. He also said StrongBox should reach profitability by the middle of next year.
Ahead of a potential raise, StrongBox will focus on establishing distribution partnerships with up to 15 medical equipment providers, consultants and sales representatives, O’Connor said.
Boca Raton, Florida-based StrongBox offers cloud-based software that provides revenue cycle and financial management services to medical and dental practices. He said the company has a national footprint and works with physician practices, dental support organizations and medical support organizations. StrongBox works with 15 lenders that provide access to alternative financing for healthcare patients in need.
StrongBox was founded in 2009 by Bradford Ress, who remains involved in an advisory capacity. A venture capital firm that has not been publicly identified owns a minority stake, with company management holding the majority, said O’Connor, who is based in Chicago.
O’Connor has a background in private equity and investment banking and “excels at growing and operating businesses by implementing and executing on strategic objectives,” according to his website biography. He came aboard as StrongBox CEO in mid-2016.
by Claire Rychlewski in Chicago