Medical supplies — a market that, by some estimates, will do over $300 billion in U.S. sales in 2022 — is the lucrative land that digital forgot, and venture capitalists (VCs) appear to agree.
That’s a serious vote of confidence at a time when VCs have left town for summer, in a manner of speaking, and are increasingly reluctant to place bets on companies without strong balance sheets. Take medical supply eCommerce platform bttn (pronounced “button”), which completed a $20 million Series A funding round in mid-June, even as startup money dried up.
“For too many years, this $250 billion-a-year-plus medical supply market has largely been left out of digital transformation,” Bttn CEO and co-founder JT Garwood told PYMNTS. “This is inclusive of the entire ecosystem. I’m talking all the way from manufacturers to across the supply chain, to the distribution, to the customers.”
It’s true; healthcare has been in the crosshairs since the pandemic arrived, exposing frailty, fraud, waste and abuse in the system meant to keep people healthy — and even alive.
Garwood said bttn is remaking antiquated approaches by offering faster onboarding and easier product access — along with price transparency and cost savings. Founded in 2021 and already claiming more than 7,000 customers, Garwood said bttn is effectively playing to the weaknesses of medical supplies, and there’s no shortage of those.
Noting that bttn is not an open two-sided marketplace — although suppliers, distributors and manufacturers are in the flow — he said, “Every customer when purchasing is purchasing from bttn, and that’s really important in healthcare because customers want to know where their products are coming from and who’s responsible at the end of the day for those products.
“We are actually running an incredibly light business model. We don’t carry any inventory or warehousing. We rely on the distribution networks and delivery methods of our partners.”
Don’t Call It ‘Disruption’
Uncomfortable with being called a ‘disruptor,’ Garwood nonetheless knows where the weak links are in the medical supply chain and believes his platform can reinforce them.
As for who’s being disrupted exactly, it’s a combination of legacy distributors, manufacturers and group purchasing organizations (GPOs), he said.
“I really don’t like to use the term ‘disruptor’ because we are just trying to build the next generation, a tech-first, tech-enabled version of this industry that’s just been left behind,” he continued. “I think that we’re going to make a huge impact by being able to offer a better business model that saves our customers more money.”
Comparing what bttn is doing in the medical supply sector to what FinTechs have been doing in banking and finance for years, Garwood told PYMNTS that bttn is riding the wave of B2B companies increasingly rolling out consumer-grade eCommerce experiences.
“With virtual care and all this innovation happening on the patient side, it really struck a chord that we believe it should be happening on the back end as well,” he said. “Healthcare has a lot of complexities to it. Some are warranted, some are not.”
He added that “we’re targeting all the ones that are not and making sure that bttn is a really wonderful experience for each one of our customers.”
Amid Chaos, Opportunity
Flush with a $20 million investment, the company — which went to market in March 2021 — is using its fundraise to build out capabilities, lower costs, add efficiencies and make a difference.
“It comes back to hyper scaling our growth in 2022 and beyond,” Garwood said. “Our goal is no less audacious than bringing transparency to the entire healthcare ecosystem. This funding enables us to do that by building our distribution access, building our customer and product catalogs, and making sure we can serve every single healthcare provider across the U.S.”
While the company clearly impressed its VC investors, inflation exacerbated by ongoing supply chain issues is still causing shortages despite a de facto end to the pandemic proper.
Noting that healthcare tends to be insulated from certain turbulence because people must see the doctor and get their medical supplies whether there’s a bull or bear economy, bttn wants to take its cash infusion and concept to capture this opportunity in the now.
“If you look over the past 20 to 40 years, healthcare distributors have been protected from these sorts of downturns, but that doesn’t mean bttn’s not keenly aware and planning for every case scenario default alive,” he said. And he seems relatively unruffled by macro headwinds.
Pointing to the plight of burned-out healthcare workers, he said, “We can’t understate what they’ve been through over the past few years, and we should be doing absolutely everything in our power to enable these folks with more cost-effective time-saving solutions.”
He added that “the industry is craving transparency. The complexities that exist in this model are not ‘good’ complex, they’re ‘bad’ complex, and we need to add more transparency because ultimately that will allow every single one of us as patients to reap the benefits of cost savings.”