ProviderActive’s FundMe page does not provide a valuation, which is an automatic red flag for investors evaluating this deal. For what it’s worth, ProviderActive’s valuation ought to be extremely low. It’s not yet clear that the company’s founders know how they’ll solve the problem they’re focusing on, and accordingly, ProviderActive is pre-revenue. 

The healthcare industry undoubtedly represents a massive opportunity for innovation. The entire healthcare services market is expected to reach $9.7 trillion by 2023 with a 7% CAGR. Healthcare spending is higher in the U.S. than anywhere else in the developed world. As a related market category, the U.S. healthcare IT market is projected to grow to almost $150 billion by 2025, at a strong 11.7% CAGR. ProviderActive has identified the pressing issues causing this market to expand: poorly integrated solutions between healthcare stakeholders, ballooning government spend on inefficient health services, and more. 

However, it’s very difficult to assess ProviderActive’s addressable market because it’s unclear what the company actually does. A well-designed solution to integrate unwieldy databases and softwares certainly has the potential to capture a share of this lucrative market — but it’s too soon to tell whether ProviderActive can be that player.

While ProviderActive’s solution is dubious, the company’s team is relatively well-experienced in healthcare. CEO Markus Toffe has worked in healthcare for over 20 years, having held various roles in project management and business analysis at Anthem Blue Cross. He has also served as a consultant for at least one other healthcare organization, “providing insight and guidance regarding the interchange between healthcare service providers and payors [sic].”

ProviderActive President and COO Kristen Montez is a health law attorney with a focus on surrogacy law (representing egg donors and intended parents). She received her J.D. almost 15 years ago and has led her own firms since 2013. It should be noted that Montez does not list ProviderActive (or the company’s umbrella entity Atomic08) on her LinkedIn profile. 

Toffe and Montez have many years of experience in healthcare or healthcare-adjacent fields. However, neither of them has a technical background or prior experience with entrepreneurship. It is difficult to say whether they are prepared to develop what they ambitiously describe as a software platform to connect the entire healthcare industry. 

It’s impossible to assess ProviderActive’s level of differentiation from competitors in the healthcare SaaS space, because the company gives very little tangible detail about what its product will do. It’s worth noting, though, that ProviderActive is far from the first company to tackle the antiquated infrastructure supporting the connection between insurance providers and healthcare entities. Many companies have combined to raise billions of dollars in venture funding to “fix” healthcare. When ProviderActive ultimately settles on a product direction, it will have to navigate intense competition among many players in this space.

ProviderActive is pre-revenue, and more than that, pre-product and potentially even pre-product-idea. Therefore, there are no performance metrics to assess.

ProviderActive provides a good deal of text on its raise page, and even a full business plan with pages of content. However, despite all of this material, it’s very hard to determine what the company actually intends to do. The problem that ProviderActive has identified is a clear and pervasive one, but ProviderActive has not proposed a clear solution to solve it beyond jargon-rich platitudes about how a hypothetical SaaS platform could be the cure-all. It’s also suspicious that ProviderActive’s materials frequently mention artificial intelligence (AI) without clear explanation — an all-too-common tactic of tech companies who use the buzzword to build interest despite not having any rigorous artificial intelligence algorithms backing their products.  

At this point, ProviderActive simply doesn’t seem to exist, so the company’s situation would have to evolve dramatically to present an attractive opportunity for investors.

There’s a chance that ProviderActive’s team, with their meaningful experience in the healthcare industry, does have a winning idea for a healthcare SaaS company and will be able to scale that idea into an impactful, revenue-generating company. At this point, though, it’s just too early to say. 

The ProviderActive team recognizes an issue with healthcare’s antiquated software and data infrastructure. However, they don’t seem to have developed a robust solution to solve that issue yet. We cannot recommend that investors contribute funds to a company with no clear product plan, particularly when the company’s valuation is not listed. Therefore, ProviderActive has been rated an Underweight Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to [email protected].