Stedi CEO Zack Kanter on building a $142M-funded healthcare clearinghouse from auto parts roots

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Have a great one. Let me tell you about app loving. Profitable advertising made easy with Axon.ai. Get access to over 1 billion daily active users and grow your business today. And without further ado, we'll bring in Zack Caner from Steady. Zack, how are you doing?

What's going on?

We no audio. You look fantastic. Many books.

This lighting is fantastic and the bookshelf is fantastic. Uh this is of course Zack Caner. He is the founder and CEO of Steady.

How about now? Can you hear me now?

We can hear you now. How you doing?

Here we go, guys. Thanks for having me.

Thanks for hopping on. I feel like I'm surprised I feel like I've never met you in person, but I know you from the internet for so so long. So good to finally meet.

Well, we're Twitter friends. You know, it's how I meet uh many of my reputable and disreputable friends.

Exactly. But for those who haven't been following you and your journey, uh since it is the first appearance, please introduce yourself and the company.

Sure. Uh I'm Zach Kra. I'm the founder and CEO of Steady. Uh it's spelled Sti.

The uh we're a healthcare clearing house. So if you're not familiar with the world of of healthcare, you know, we exchange the administrative transactions that power all of all of healthcare. You probably heard stats like this before that healthcare is 18% of US GDP. So it's a pretty meaningful chunk of the of the ecosystem, but you know, you go into your doctor's office, they ask you for your driver's license and your insurance card.

Mhm.

And then they tell your co-pays $20 and you have three visits left and all those details. That's a transaction called the real time eligibility check that happens under the hood. Uh we process those. We process tens and tens of millions of those per month. And then when you know you finish the encounter, whether it's a surgery or a or you know teeth cleaning, whatever it might be, they have to send a claim. There's a series of messages that come back. So there's an adjudication message that comes back uh saying the claim is rejected or accepted and then the claim gets paid somehow. You know, you get those things in the mail that say this is not a bill explanation of benefits. Your doctor gets one of those as well. They can get them via paper, but they can also get them electronically.

And basically, we process all these transactions back and forth. And why can't a registered nurse just vibe code a system to do this for them? I'm just kidding.

Well, it's a funny question like, you know, it's interesting. So, we we primarily, you know, we think about our business as selling to other technology companies. You think about us as like the the stripe of of healthcare. The um uh but we've seen a surprising number of of these small and medium-sized doctors and dentist offices that are that are signing up. And so we we recently did an analysis and spoke with a bunch of these uh uh places and it turns out that indeed doctors are vibe coding uh revenue cycle management systems. So you know it's not thousands of them but it's dozens of them.

It just has happened. That's amazing. That's very cool. Yeah. What what what have been the key milestones for the business? You're raising new money today. Your name is steady. John was saying how he's known you forever from the internet. I feel I feel I feel just steadily

uh chugging along. But but yeah, what what does this milestone represent? Like what did it take to get here? Healthare every healthare founder will tell you that that obviously this big massive market but but you know doesn't move as fast um and it can take you know years to make progress that another industry might might happen in a quarter or something like that.

Yeah, it's uh it's interesting. So you know we didn't start in healthcare. I don't come from a healthcare background. I previously started a brand of auto parts. So I manufactured auto parts in Taiwan and China

and you know follow the typical auto parts to healthcare pipeline as manufacturers do. And uh uh in building that business you know I sold to O'Reilly Auto Parts in Amazon and these different retailers

and uh I had to at some point it was probably in like 2011 the transaction uh volume got such that it wasn't feasible to have these things manually entered anymore before AI. And so uh I reached out to all the different retailers that I was selling to and asked them to send me the API spec for for their you know purchase orders so I can automate the transactions. And you know over the next two weeks they all wrote back and they said what's an API? Yeah.

And so yeah things got a little bit better since then. But what I found out at that point was that this whole world of of retail logistics supply chain uh transportation etc. uh manufacturing is powered by a technology called X12 EDI. And so if you see steady is spelled STEDI uh it's because we we started with this underlying EDI technology. And um you know long story short uh maybe long story long here I I got so uh uh frustrated with the various EDI systems that were out there said like look what I want to do is I want to receive purchase orders in. I want to get them into Netswuite. I want to have those automatically sent to a warehouse. I want the warehouse to ship the order. I want the transaction to come back. I want when things come in via flexport. I want those things to, you know, get automatically pushed into my system. Um, this can't be that hard. Uh, kind of famous last words. And I was got so sick of the the solutions that were out there that I ended up having my own system built. And then, you know, I ultimately sold the auto parts business uh to a private equity firm and I started study

and uh, you know, I spent like 50 grand on first, you know, was a bootstrap business. So, spending 50 grand is a lot of money. Uh, 50 grand on building this homegrown uh, platform. And um I was like, you know, it's going to cost like 10 times as much uh to do this for everybody for all transactions. I was like, but to be safe, you know, as margin of safety, I'll I'll raise a million dollars instead of 500K. And you know, now we've raised $142 million total, and I think we we you know, still have still have more to give.

It's gone time. It's gong time.

Here we go.

Uh thank you. Thank you.

What What's your favorite car?

Uh favorite car? Um you know, it's funny. Like I grew up, you look at uh you know the Porsche 911, you say like that's like a a a car that old guys who don't know anything about cars buy. Um and then you go and you drive one. Uh and it actually turns out that 911, you know, 60 70 years of iterative design is is pretty good.

Yeah.

What kind of auto parts were you selling? I'm I'm in the market to pick up a straight pipe exhaust system as a birthday present for Jordy. I'm hoping to get him some LED underlighting as well. Maybe stance his car. Were you doing anything like that? I can I can hook you up. You can help. We're going to It's going to be like It's going to be like uh you know TBPN my ride edition.

Yes. Yes. That's what I'm looking for. I want a horse. You like horses? We put a horse in your car. We put a gong in the passenger seat. You can't transport anyone, but it looks good.

John John has been trying to get me to go the Mansori route for for years, and he will be doing it until he You got to do it. Until you do it out of this earth.

Until you do it with the full sponsored livery wrap car.

Uh you guys hiring I'm assuming?

Yeah.

Oh yeah.

Yeah. Engineers product.

Talk a little bit about the company culture. Where are you based? Are you in person, remote? Like what's the what's the scale of the company right now?

So we're about 125 people. Uh we're um distributed. We have a bunch of people in New York, but we've got people all over the place. I live in the Bay Area. Okay. And um uh look, I think you know with the talent wars, you know, look, there's obvious pros to being in person. Um at the same time, you're kind of making the implicit decision that you're going to exclude 99% of your potential hiring pool and saying we're not going to be able to hire those people. And for us, we think the trade-offs worth it. So we're uh yeah, we're all over the place.

That's amazing.

Awesome.

Well,

so great to finally meet amazing progress.

Yeah. Thanks so much.

Thanks, guys. Thanks for having me on the show.

We'll talk to you soon. Have a good one.