Fintech & e-commerce Startups Venture

Walnut Cracks Open $110M Series A For BNPL In Health Care

Buy now, pay later (BNPL) startup Walnut closed a $110 million Series A led by Gradient Ventures.

The round comprised $10 million in equity financing and $100 million in debt. The debt financing was provided by Clear Haven Capital.

While the BNPL space in general has become popular—and drawn the attention of regulators—Walnut focuses solely on the health care vertical. Its platform allows patients to spread their health care costs out over time.

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In a blog about the funding, the New York-based company said more than half of the country has medical debt and over 60 million Americans skip care every year due to worries about cost.

Startups in the BNPL space have garnered significant interest from investors. Venture-backed companies in the BNPL space raised more than $4 billion in 2021, according to Crunchbase data. That marks a significant increase from around $1.7 billion in 2020.

There also has been significant dealmaking, including Affirm going public last year, and Block (formerly known as Square) bought AfterPay for $29 billion.

However, the entire space has come under added scrutiny the last few months. In December 2021, the Consumer Financial Protection Bureau opened an inquiry into BNPL credit in a series of orders. The bureau also plans to collect information about the risk and benefits of the BNPL industry.

Shares of Affirm—a bellwether for the industry—are down nearly 45 percent from its $49 per share IPO price in January 2021.

Illustration: Dom Guzman

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