Fintech startup Flex raises seed round to help DTC consumer health and wellness brands accept HSA and FSA payments online

SAN FRANCISCO, Sept. 4, 2024 (GLOBE NEWSWIRE) — FoldFlex, which offers the easiest way for direct-to-consumer health and wellness brands to begin accepting HSA and FSA payments online, today announced it has raised a $3.2 million seed round from Y Combinator, SV Angel, Precursor, Liquid 2 Ventures and others. Flex will use the funding to accelerate product development and sales and marketing, and to capitalize on strong interest from brands to capture more than $150 billion in potential annual HSA/FSA spending.

“We were impressed by the strength and experience of the Flex team, whose deep financial technology expertise and proven execution capabilities gave us great confidence in their ability to deliver on their ambitious vision to transform the healthcare spending landscape,” said Beth Turner, Managing Partner at SV Angel.

Charles Hudson, Managing Partner and Founder of Precursor Ventures, said, “Flex is closing a large and important gap in the payments ecosystem, one that will help brands and consumers leverage HSA and FSA dollars more efficiently.”

Flex's clients include fast-growing brands such as KindredBravely, BedJet and Lumen.

To date, online acceptance of HSA/FSA payments has been complex, primarily due to the need to check each item’s eligibility on the fly. This means that only very large merchants with extensive IT resources—companies like Walmart and Amazon—have been able to build their own systems to process HSA/FSA payments online. Smaller merchants have not been able to take advantage of consumers’ desire to spend their HSA/FSA money online. Instead, consumers must pay out of pocket and submit itemized receipts to their FSA provider to request reimbursement. The difficulty of that process means that consumers often purchase their products elsewhere, from merchants who make the process easy.

Flex can help merchants start accepting HSA/FSA in as little as 30 minutes and currently works with over 100 brands. The company offers two main solutions.

• Flex Product Verification provides a quick and easy way for merchants to identify and process payment for items that are Eligible for all – such as over-the-counter medications, menstrual products, and first aid supplies – during checkout.
• Flex Health Check is intended for merchants who sell dual-use items, meaning they may be HSA/FSA eligible for consumers whose doctors indicate they are medically necessary to treat a condition. Health Check leverages telehealth to allow a healthcare provider to determine if a customer qualifies to designate a purchase as a medical expense.

Flex works like Stripe for the HSA/FSA ecosystem. At the heart of the Flex platform is a sophisticated API that allows the business to quickly verify item eligibility and then process payment for those eligible items. Specifically, Flex interacts with the SIGIS List of eligible productsSIGIS is a nonprofit subsidiary of the IRS responsible for determining which items are eligible for HSA/FSA spending.

Sam O’Keefe and Miguel Toledo founded Flex in June 2023. The two had previously worked together in the anti-fraud group at fintech startup Unit 21 and had an interest in the intersection of healthcare and fintech. Specifically, O’Keefe (an athlete with a deep interest in fitness) wanted to explore ways to get health insurance companies to cover exercise programs. After researching the market and speaking with many merchants, the two co-founders decided to focus on helping D2C consumer health and wellness companies take advantage of HSA and FSA spending programs.

“Flex is differentiated by its comprehensive approach, offering product verification during checkout, the ability to confirm eligibility for dual-use items, issuance of letters of medical necessity, and split-bid management (orders that include both eligible and ineligible items),” said O'Keefe. “Flex offers the most comprehensive solution available to help brands accept HSA and FSA payments online.”

Flex distinguishes itself from its competitors in several other ways:

• The team's deep knowledge and experience in the payments ecosystem.
• Ability to meet your customer where they are with multiple implementation options, from a robust API to a Shopify payment app and a no-code solution to get up and running quickly.
• Ability to provide guidance on the regulatory landscape, including submitting products for consideration for the SIGIS Eligible Products List.
• Rapid mobility and onboarding, in just 30 minutes, and usually within 48 hours.

About Flex
Fold Flex offers the easiest way for direct-to-consumer health and wellness brands to start accepting HSA and FSA payments online. Flex enables merchants to tap into $150 billion in potential annual HSA/FSA spending, driving new revenue, increasing shopping cart size, and improving customer retention. It also helps consumers expand the reach of their HSA/FSA eligible spending and ensure they don't lose their FSA funds at the end of the year. Flex is known for its deep understanding of HSA/FSA eligibility and for offering the most comprehensive merchant solutions. Merchants can get started at www.withflex.com.

Press contact:
Michelle Faulkner
Big swing
617-510-6998
michelle@big-swing.com

A photo accompanying this announcement is available at