Flex Raises $15M To Expand HSA/FSA Payments Access
The company said it’s grown its customer base fivefold over the past year, adding brands including Therabody and NordicTrack
Flex has raised $15 million in Series A funding to expand its platform that enables Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) to be used directly at checkout for qualifying purchases, including on top fitness and wellness products.
The round was co-led by First Round Capital and Core Innovation Capital, with participation from Cameron Ventures, Rethink Impact, Y Combinator and Liquid 2, bringing Flex’s total capital raised to $18 million.
The HSA/FSA payments company said it’s grown its customer base fivefold over the past year, adding brands such as Dermstore, Therabody, Omnilux and NordicTrack.
Balanced Body, a Pilates equipment maker, began accepting HSA and FSA payments through Flex in May, covering everything from props and accessories to its $2,295 Metro IQ reformer designed for at-home use, while Alo Wellness has partnered with the platform to let subscribers pay for its digital fitness platform with pre-tax health dollars.
Flex plans to use the capital to push into the enterprise market, grow its team and enhance its platform capabilities.
The company points to a broader market challenge: Americans hold nearly $150 billion in HSA and FSA accounts, much of which goes unused because consumers are uncertain about eligible expenses and many retailers do not accept the cards at checkout. On average, account holders forfeit about $450 in unspent funds each year, according to Flex, and easing that friction can benefit merchants as well.
Retailers using the platform have reported more than a 50% increase in average order value, checkout conversion lifts of up to 30% and a 20% rise in converting free trials to paid plans, the company said.
“We’re building the payment infrastructure for the health economy,” Flex co-founder and CEO Sam O’Keefe told Athltech News. “With this new funding, Flex is scaling to meet the demand from health and wellness brands who want to drive growth by making HSA and FSA payments simple, compliant and seamless for their customers.”
O’Keefe credited Flex co-founder Miguel Toledo and highlighted support from First Round Capital partner Liz Wessel, Core Innovation Capital’s David Roos, Rethink Impact’s Jenny Abramson and Aaron Webster at Cameron Ventures.
“We’re thrilled to back Flex as they unlock a smarter way for Americans to use their pre-tax dollars on everyday health and wellness,” Wessel said. “Their payments infrastructure serves the technical needs of companies at scale, and the retailers integrating Flex are seeing significant business impact.”
Last month, Flex expanded its partnership with Therabody to make several of the brand’s devices newly eligible for HSA and FSA spending. The update provides access to products such as the FDA-cleared TheraFace Mask, which uses LED light therapy to improve skin health, along with the recovery tech brand’s SmartGoggles and SleepMask.