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September 20, 2022

Scratch Reimagines Patient Financing for the ‘Care Now, Pay Later’ Economy

orange cat at the vet

Chances are you or someone you know has brought home a new pet in the past few years. Pet ownership has been on the rise; according to the 2021-2022 APPA National Pet Owners Survey, 70 percent of U.S. households owned a pet in 2021, up from 67 percent in the previous survey. With the increase in pet ownership, pet expenditures have also skyrocketed. Spending on our furry friends exceeded $100 billion for the first time in 2020, with veterinary medicine and care accounting for more than 20 percent of that.

Fortunately, veterinary medicine has advanced rapidly in the last decade. Pets can access sophisticated technologies that historically were available only to humans, such as laparoscopic surgery and more advanced oncology treatments. The downside, however, is that these advanced forms of diagnosis, treatment, and care are more expensive and more than 98 percent of dogs and cats are not covered by medical insurance, leaving most pet owners to foot hefty medical bills themselves. One study found that roughly two-thirds of pet owners would not be able to afford a surprise vet bill, so many pets do not receive the care that they need.

Vet clinics are also burdened as they have had to navigate confusing third-party financing options alongside their patients and potentially turn patients away, all while being understaffed and still trying to manage higher influxes of pets.

This was what John Keatley and Caleb Morse discovered firsthand when Caleb found an abandoned kitten in a dumpster in his neighborhood in 2016. He adopted the kitten, named him Hobbes, and took him to the vet. The good Samaritan was astounded when he received an astronomical vet bill. The experience led the long-time friends, who had worked together at payment platform company Green Dot, to co-found Scratch Financial. They saw that pet medical financing needed to improve and decided to build Scratch to provide a simple and convenient solution for providers and patients.

Scratch Financial founders Caleb Morse (L) and John Keatley with Hobbes
Scratch Financial founders Caleb Morse (L) and John Keatley with Hobbes the cat

Enter Scratch

Scratch is a fintech solution that offers customer-friendly financing to help patients and pet owners get immediate access to care. After an easy online application, patients can get instant approval for a one-time payment plan without a hard credit inquiry. This saves patients from needing an extra credit card specifically for medical expenses, which is the alternative to Scratch today. With Scratch, depending on their financial and personal profiles, patients may choose from a variety of financing plans, including a “care now, pay later” plan that splits medical bills into multiple payments with 0 percent APR.

Scratch Financial’s latest product, Checkout, is an omnichannel, cloud-based payments processing solution for patient financing. Checkout supports next-generation features such as digital invoicing, text-to-pay, and membership plans. Together with Scratch’s financing options, Checkout creates a seamless payments experience for patients, who gain more financial flexibility, as well as for providers, who can streamline operations and reduce their administrative burden. The result is better care and a frictionless experience for all.

Today, Scratch is available in one-third of all veterinary practices across the U.S. and Canada.

Our partnership with Scratch

We are ecstatic to announce our investment in Scratch’s Series C. We have spent a lot of time with John, Caleb, and the rest of the Scratch team, and we believe that, with more than 90 years of combined leadership experience across fintech, lending and payments, and multisite healthcare, they are uniquely positioned to disrupt the patient financing landscape.

Moreover, the team has made amazing progress so far and shows no signs of stopping. Building on their vision to reinvent patient financing, they are continuing to expand not only in vet but also in other healthcare verticals, including dental, wellness, and vision, where patients historically have lacked financing options.

Welcome to the Norwest family, Scratch Financial (and Hobbes)!

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