The following interview is a conversation we had with Matthew Renfro, CEO of Lynx, on our podcast Category Visionaries. You can view the full episode here: $17.5 Million raised to Bring Modern Fintech to Healthcare
Matthew Renfro
Thanks for having me. Excited to be here.
Brett
Yeah, no problem. So before we begin talking about what you’re building there at Lynx, let’s start with a quick summary of who you are and a bit more about your background.
Matthew Renfro
Yeah, sounds great. So I’m Matt Renfro, and I live in the Boston area, actually just south of Boston with my wife and two kids and spent about half my career in financial services and payments and the other half in the healthcare space between Fidelity Investments and Optimum United Health Group. So started Lynx in 2021, and it’s been fun just starting a company and getting to meet people like you.
Brett
And I don’t hear a Boston accent. Are you from Boston? Originally?
Matthew Renfro
I am, but my dad’s from Kentucky. My mom’s from Cambridge, mass. But I grew up north of Boston in Andover, but don’t have I think the Kentucky blend with the Boston accent that my mom has just made. It just an accent that is not detectable for what you would see in maybe South Boston or Cambridge.
Brett
When I was in Boston a couple of months ago, I got in the Uber, and I honestly could not understand what the guy was saying. His accent was so strong or the Boston accent was so strong.
Matthew Renfro
Yeah. And I live on the south shore now in Haina, Mass. And if you’re in the real places, you’ll have a lot of people with those accents. Most of my mom’s family. That’s how it is.
Brett
Yeah. Nice. Now, one question we like to ask just to better understand what really inspires you and what you admire. Is there a specific Founder that you admire the most and who is it and why do you admire them?
Matthew Renfro
I would just say founders in general. Having been in a large company in the comfort of the Fortune Five company, in the salary and benefits packages, it take a note of courage to go out and start your own venture. And I’ve met with several founders and know them from former lives and my current lives and can be a very lonely place at times, especially if right now you’ve raised a seed round and you’re running out of cash and how can you get it done anyway? I draw inspiration from a quote I think it’s Winston Churchill, but my friend Tom Brady likes to quote this man in the arena quote, and I think that’s a pretty interesting one for what founders have to go to, that you really have to take a risk to go and start your own thing. And there’s a lot of people on the outside that think you won’t be able to execute or get something funded or create a business.
Matthew Renfro
So, anyway, that’s my very general answer, that I think anyone that’s made the decision to go out on their own and start a company, I draw inspiration from.
Brett
And what was that like for you when you decided to embark on this journey? So moving from working at a massive company, sure you’re very well paid to go into the unknown world of starting a startup. What was your psychology like there? What were your conversations like with your friends and family? Did they think you were losing it? What was that whole experience like for you before you made the jump?
Matthew Renfro
It’s probably a combination of both things you just said. But really, I had spent 2015 to most of 2020 and most of the first year of COVID at Optum and UnitedHealth. And at the beginning of 2020, before COVID hit, I was already starting to get antsy. I had different ideas even. I was in a small business unit where we could run with our own ideas and not be bogged down by kind of the governance and all of this stuff that gets a bit frustrating at a large company. But were starting to get more deeply embedded. And sometimes if you can’t run at your own pace, you start to get frustrated. And I was experiencing that, but I was dabbling or really dipping my toe into different opportunities. One was in a private equity backed company to be an executive there, where it’d be a bit more lean, have more financial upside, less predictable, I guess you’d say, but more upside.
Matthew Renfro
And I was really considering that. I was considering an even more early stage offer in the venture capital space to be a COO or a chief commercial officer. But ultimately, I stuck around United until I came up with this idea with Lynx, and I weighed the multiple options. I got to the point where I just said, you know what, I spent enough time here. I want to go out and do something different. That’s earlier stage, and I weighed multiple offers. Do I want to go be part of the C team at a VC backed company, or do I want to give myself a chance? And ultimately, I decided I’m just going to try to run with my idea, get it funded. And times were definitely I’m not going to say it’s the easiest thing of all time, but it’s probably easier. It was easier back in late 2020 than it is now to just get an idea funded.
Matthew Renfro
But really, I give myself a period of time and there wasn’t much pushback from family and friends. I think a lot of the feedback I got was, hey, you’re young, why not take a chance?
Brett
Nice. I love that. Well, let’s talk about what you’re taking a chance on. Let’s dive deeper into Lynx. So at a high level, what’s the pitch?
Matthew Renfro
We’re an embedded fintech platform focused on healthcare. And I think personally, we have our best in class payment and banking experiences that we deal with every day, whether it’s a bank of America or Capital One, or if it’s newer neo bank like a Chime. And those types of solutions really aren’t possible or at the disposal of these massive health care distributors who ultimately create financial relationships with millions of people. And what we’re really setting out to do is to give, whether it’s a health plan or a benefits administrator or a payroll provider, the ability to create and own a financial relationship with their patient member consumer on infrastructure. That is more comparable to what people expect in their personal lives and less like a claim system that was built 20 years ago to build a health savings account that acts like banking. In 2002. So that’s kind of the high level.
Matthew Renfro
It’s this embedded fintech platform focused on healthcare and we’re really equipped to help these large distributors better own and control and manage the financial experience for their customer.
Brett
And I saw on your website that you recently conducted a survey, I believe it was 2500 consumers about the healthcare experience. Could you talk us through any of those high level findings and how those findings really validate what you guys are doing?
Matthew Renfro
Yeah, I think a lot of the research we did was just based on how do people want to consume health care? And we had some assumptions as far as where people engage and where they don’t engage. People generally are highly engaged in the fintech side. I want to understand if I’m living paycheck to paycheck, I want to understand what is my account balance so I’m not overdrafting or other functions like that. With that said, I’m not waking up every day thinking, well, what’s going on with my health insurance website? That’s more of a reactive thing where, oh, I am ill, I need to go to the doctor and then trying to figure out how to log into a healthcare website. So the questions we really asked in our research really were based on would you engage with a platform that not only could be a place where you manage your critical financial accounts?
Matthew Renfro
Whether it is a true bank account or if it’s a healthcare focus health savings account, but also was able to connect you with what is the highest rated doctor in my network. Or how can I get in contact with a provider in minutes? And really, I think where the results kind of were leading us is that people generally are looking to save time and money in healthcare. It’s very confusing to understand, well, who is the best doctor to go to, how do I save on my prescription, how do I maximize my tax advantaged accounts? And our solution is really equipped to go to the different distributors that have many of these assets, but to help tap into the financial first mentality that people generally have to help put people on a path to save time and money across their healthcare and beyond ecosystem.
Brett
And when we take a look at the product, then what does the business model look like and then who’s that end decision maker that you’re selling to?
Matthew Renfro
Yeah, the business model is pretty much a fintech or neo bank type of business model with the healthcare twist. So we are on the issuing side of payments. So Envision, whether it’s virtual or physical, one large health plan has a referral relationship with potentially north of millions of payment cards that are administered by a legacy claim system. And we’re really disintermediating those types of claim systems with our modern bank embedded fintech platform. And so it’s traditional as far as we can earn monthly fees on the cards we administer or the bank accounts we administer. We earn an interchange so card swipes, we earn net interest income. So the assets that are in our accounts, there’s a spread you can make there. The healthcare twist is we also are connecting people to perhaps the HSA eligible over the counter product that can be delivered to their home or to the virtual care provider that is in network and many other types of health programs, whether it’s healthy food or population health in general.
Matthew Renfro
And anytime we engage someone in their health, we’re not necessarily running the smoking cessation program or we’re not managing the working capital of the over the counter products, but we earn marketing fees for where we connect someone to that product and service. And that ends up being a profitability infusion on our business model where we’re not just reliant on interchange like other solely fintech based startups, there’s a real profitability infusion that healthcare provides.
Brett
Interesting. And are there any numbers you can share to just demonstrate the progress you’ve made so far and the growth you’re seeing?
Matthew Renfro
Yeah, I’d say we’re definitely early, but we’re launching an enterprise partnership with a company, we can’t really share the name, but with a company that touches north of 10 million members. It’s a healthcare company that helps with benefits, navigation, digital, therapeutics and beyond. And we’re their fintech backbone. So that’s a foundational type of partnership for us. We’ve got several others who are looking at either in contracting or going to be entering contracting as far as migrating from the legacy software system that administers HSA and FSA and migrating over to our platform. So some platforms or some of these distributors already have north of 10,000 financial accounts that can be switched over. So hopefully that gives you a general sense, but we’re a B to B company, so we’re not going direct to consumer, we’re not going even to employers. We’re really looking at who are the distribution partners that have thousands, if not tens of thousands employer relationships and millions of consumer relationships that we can help be a critical infrastructure for them to start to own the financial relationship.
Matthew Renfro
And it’s longer sales cycle, no doubt, but it only takes a few distributors a year to make a pretty valuable business.
Brett
And just to understand that market landscape, how many distributors are there in North America or just in the US?
Matthew Renfro
Well, I’d say it’s pretty broad base of who we’re selling to in healthcare. And on the back end, our tech doesn’t really change as far as even if the distributor seems very different. It’s the same APIs and whatnot maybe slightly different data elements, but one large channel is health plan. So for your traditional health plans, think your Blue Cross, Blue Shield Health plan, or Anthem, or Aetna Cigna, there’s probably 500 health plans, maybe more when you consider TPAs and self insured employers. And they have multiple different lines of business that have different stakeholders. And when you look at beyond the health plan space, there’s financial institutions who also have to use the same legacy players on the healthcare HSA and FSA side. So you could look up how many banks are out there that play in the healthcare space. There’s benefits administrators and payroll providers who are disruptors that touch tens of thousands, if not hundreds of thousands of employers that are distributors.
Matthew Renfro
So each channel you look at, you could see that there’s thousands, if not more distributors. And the buyer really depends on which channel we’re talking about. But there’s a clear financial component to what we’re talking about. We generally can flip an expense to a revenue driver for these partners. And so the CFO, whether it’s of a division or if it’s the CFO overall, there’s a financial equation there, but also it’s the product leads. So people are looking at, well, how do I control more of my member experience? Maybe I’m outsourcing the financial components to a vendor future state. I can own that and have something really differentiated from the other health plans. So it’s that combination of financial and product buying. Got it.
Brett
And then getting big companies like that to trust the startup I know is very difficult. What would you say you’ve done to really communicate with these customers and get them to believe in what you’re doing?
Matthew Renfro
Yeah, it is. I mean, it’s very difficult. I’d say the newness of our company, it can be a key challenge where as much as we’ve got this great team, were in an RFP for millions of accounts three months into when we started the company. So realistically, as good a sales pitch as we can give. When you look at when the company was founded, you kind of can see through. Well, you couldn’t have built all of this in three months, but now that we’re over that hump and we’ve shipped product and we’ve been around for almost two years, that’s changed the dynamic there. Beyond that, it is the team. So I led the nation’s largest health savings account and flexible spending account platform, and probably the largest healthcare payments platform as well. We were administering north of 8 million consumer accounts. We were processing $200 billion in ACH payments a year.
Matthew Renfro
So it brings credibility that we did it at the largest healthcare company or one of the largest. Our CIO was the CIO of Optum Bank, again, probably the only healthcare focused bank, and it’s an industrial FDIC chartered bank. So his name is Ken Abel. Ken’s experience is second to none as far as he ran this highly regulated bank from a technology standpoint with the FDIC within a highly regulated health benefits and services company with UnitedHealth Group. And that’s how we get over the trust. We’re not building kind of this pretty app that doesn’t work on the back end. Most of our investment has gone into the infrastructure of how can we get these complex large organizations to trust that their data and their platform and consumer accounts are in the best hands possible at this intersection of two highly regulated industries? And we could list out other people, but we’ve got several people who come from the former head of Merchant services at Wells Fargo and other big names across the board that really position us differently than who we’re competing against.
Matthew Renfro
Got it.
Brett
Makes a lot of sense. And what would you say excites you most about the work you get to do every day?
Matthew Renfro
I’d say what excites me most, I think keeping the ball rolling on strategically the partners that we’re launching with and the problems we’re solving that we think need to be solved ASAP. And then I’d say there’s so many opportunistic discussions we have that we probably weren’t thinking about a month ago, but we have a random conversation with a retailer and realize, hey, this retailer is really looking at how to combine their loyalty program with getting more into how people can eat healthy and do more health care services. So it’s kind of a hybrid of it’s exciting to just drive our strategy and roadmap and keep focused while also talking to a number of people in different sectors and industries and seeing what their use cases might be, which potentially could influence the future roadmap. So I’d say that’s probably what excites me most.
Brett
Nice.
Matthew Renfro
I love it.
Brett
And if we zoom out into the future, what’s the three year vision for the company?
Matthew Renfro
We want to disintermediate these legacy software systems that the industry has only had these two choices for the most part. When you look at the HSA space and then Medicare, there’s other legacy vendors, but we want to disintermediate these platforms to allow these large companies to really maintain the financial experience within their healthcare experience so it doesn’t create this confusing, disconnected experience for their end customer but future stay. I think the broader vision is a person’s health and finances are directly tied. Someone that makes more money can generally make better health care decisions and someone that makes less money may not be able to do that out of necessity. I’ve got to pay for my food before I can think about doing my preventative visit. And this disconnect between health and finance is something we’re very passionate about closing, and whether that is helping the everyday person to better afford and pay for health care, or if it’s helping that emerging senior going on Medicare.
Matthew Renfro
Advantage to ensure that they’re not going to have some gap between Medicare covers and what their savings are three years from now. I think we’re going to really be helping this gap close between health and finance that leads to better outcomes for someone’s personal health, but also for their financial health.
Brett
Nice. I love it. Unfortunately, that’s all we’re going to have time to cover for today before we wrap. If people want to follow along with your journey as you continue to build, where’s the best place for them to go?
Matthew Renfro
I’d say you can go to lynx-fh.com. I probably need to figure out buying just Lynx co or something, but LinkedIn, we’re pretty active on LinkedIn and if you just found Lynx on LinkedIn, that’s a great place to be too.
Brett
If awesome. Cool. Well, thank you so much for taking the time to chat and talk about what you’re building and share your vision. This all sounds super exciting and wish you best of luck in executing on this vision.
Matthew Renfro
Thank you for having me again.
Brett
All right, keep in touch.
Matthew Renfro
Our channel.
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