
AI Billing Company Waystar Files to Go Public; Ends Drought of Healthcare IT IPOs
Waystar’s mission is to simplify healthcare payments using its modern cloud-based software, ultimately helping healthcare providers prioritize patient care and optimize their financial performance. The company’s enterprise-grade platform addresses the complex and disparate processes that healthcare providers deal with to ensure accurate reimbursement, all while enhancing the payments experience for providers, patients, and payers. This is achieved through the application of internally developed artificial intelligence (AI) and proprietary advanced algorithms, which automate payment-related workflow tasks and drive continuous improvement in the healthcare payment ecosystem. Waystar benefits from powerful network effects as its cloud-based software processes millions of transactions daily, providing insights that enhance the platform and improve the performance of its products. Historically, healthcare providers have relied on manual processes and systems to navigate these complexities, resulting in delays, lost revenue, and slower payments. The company’s software is used by healthcare providers of all sizes, ranging from physician practices, clinics, and surgical centers to large hospitals and health systems. Waystar serves approximately 30,000 clients, including 18 of the top 22 U.S. News Best Hospitals. The company has achieved recurring, predictable, and profitable growth with over 99% of its revenue coming from recurring subscriptions or highly predictable volumes.
Waystar has identified its total addressable market (TAM) for its current software solution set to be approximately $15 billion within the United States healthcare provider market. and Waystar anticipates its TAM to grow to nearly $20 billion by 2027, driven by a 5% compounded annual growth rate (CAGR) over the next five years. This growth will result from the expansion of healthcare payments, increased outsourcing in revenue cycle management, and technological advancements such as greater utilization of AI. The company has demonstrated consistent growth above the market since 2016 and plans to continue expanding its market share in the future, leveraging its differentiated platform and capabilities. Currently, Waystar’s solutions hold an estimated 3% market share within the hospital segment and 7% within the ambulatory practice segment. Waystar competes against other hospital billing software providers such as Kareo, R1 RCM, Ensenmble Health, athenaIDX, drchrono, CureMD, Medica Billing Solutions, and others in a highly fragmented industry. Waystar has stated that part of its strategy is to grow through acquisitions and has been active on the M&A front supporting the trend of consolidation in the Healthcare IT space.
For the six months ending June 30, 2023, Waystar reported revenue of $387.1 million, a net loss of $21.4 million, and Adjusted EBITDA of $166.5 million. In 2022, Waystar generated revenue of $704.9 million, with a net loss of $44.0 million and Adjusted EBITDA of $295.5 million.