A Black Female Fintech Founder Leaned Into Her Differences To Raise $6.2 Million

Ami Kumordzie, MD/MBA and Founder/CEO of Sika Health, raised $6.2 million in a round led by Forerunner Ventures. The startup helps employees maximize their FSA/HSA health benefits.

Americans with Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) save for qualified medical benefits using tax benefits. These benefits include the obvious like prescriptions and the less obvious like condoms, mattresses, shoe insoles and travel pillows.

More than 40% of workers with FSAs lose some of their contributions because they have to use their benefits before the deadline. HSAs are available to consumers with high-deductible health insurance plans. The money in them can be rolled over to the next year. Seventy million Americans are registered in these accounts. To get the most out of your FSA/HSA accounts, you and the merchant you buy from need to know what is eligible for reimbursement.

A black female founding physician with no technical experience has developed a fintech platform to connect consumers with IRS-compliant merchants. Kumordzie came to the United States from Ghana when she was six. For as long as she can remember, she wanted to be a doctor. “I observed that people who were the poorest were often the sickest and those in poor health were predisposed to poverty,” she sighed. “It is a vicious and cruel circle.

When she attended Stanford University School of Medicine, she realized how broken the health care system was. “I ultimately decided not to do residency,” Kumordzie said. “Instead, I got an MBA from Stanford. My first job was as a management consultant working for healthcare clients at BCG.” The kind of analytical work she did at BCG helped her see the gap in the market and the opportunity.

However, it was her mother’s experience of losing her job as a hotel worker during the Covid-19 pandemic that was the impetus to start Sika Health. “Even though I’ve worked in healthcare my entire career, I had to step out and practically become a tax expert to figure out how she [my mother] could use these funds before she would lose them.”

Kumordzie’s mother is not alone. In 2020, workers who did not use their benefits by the deadline resulted in $4.2 billion in unused benefits.

It is a two-sided problem. Consumers struggle to figure out how to spend their FSA/HSA dollars. Merchants selling these products need help accepting FSA/HSA payments. The market is big. “About 70 million Americans are enrolled in FSA or HSA accounts, contributing about $150 billion a year,” Kumordzie said. Losing this money is a significant loss for many. “It’s a real tragedy because it’s money people could have invested in improving their health,” Kumordzie said.

In inflationary times like these, the need is even greater. “We need more ways to save and tools that help stretch our money,” Kumordzie said. “[Using FSA and HSA dollars] means in practice that you buy health services with a 30% discount on expenses.”

The financial technology used in Sika Health is similar to PayPal or buy-now-pay-later products. Behind the scenes, the platform handles compliance issues, so consumers can save and sellers can increase revenue. To begin with, the company is focused on e-commerce merchants.

Kumordzie first raised money from friends and family. “The goal was to raise $500,000,” she said. “Within weeks, I surpassed my goal and raised $1.2 million.” She later raised a $5 million seed round led by Forerunner Ventures, which is focused on consumers, including healthcare. Shine Capital, Ulu Ventures, PrimeSet, Atacama and the co-founders of fintech API company Plaid also participated in the round, as well as pre-funding from One Planet VC and Pacific Health Ventures.

The $6.2 million was one of the most significant early-stage raises by a black female founder. According to Crunchbase data, black female founders received only 0.34% of US venture capital in 2021. According Still Building: ProjectDiane 2021 Updatedespite more Black and Latinx female founders raising money, they lost some of their VC funding due to record annual investment in 2021.

Brian O’Malley led the seed round on behalf of Forerunner based on deep experience investing in e-commerce, payments and a variety of consumer brands. Many of Forerunner’s health portfolio companies recognize the challenges of seamlessly offering customers the ability to pay with HSA funds and sought a solution. Sika Health’s pre-seed investors also understood the potential of solving the problem.

Interestingly, it was leaning into her differences and not fitting the traditional mold that VCs often look for that led to success for Kumordzie. “I’m a black woman [fintech] founder with a non-traditional background,” Kumordzie said. “That’s my superpower.”

Kumordzie understood the market’s pain point because she had helped her mother figure out how to avoid losing her FSA benefits when she lost her job. As a doctor, she understood that it wasn’t just the mother who had the problem. As a health consultant, she understood the opportunity to solve this pain point.

But there was an obvious gap in Kumordzie’s skill set. She was not a technician. So she hired a team with the fintech payment chops to build Sika Health. She needed money to hire good tech people. “Early-stage hiring can feel like a chicken-and-egg problem,” Kumordzie said. What comes first, the money or the team? Sika Health was able to hire the founder of the payments team at Etsy.

“Having a brand like Forerunner as one of our supporters makes a big difference when you’re trying to hire,” Kumordzie said. “It makes a big difference when you’re having a hiring interview and trying to convince someone to leave their high-paying stable job to take a risk in an early-stage business.”

The team is not only technically solid, but multidisciplinary with strong representation by gender, ethnicity, country of origin and background. The team comes from 1010Data, Amazon, Capital One, Etsy and Klarna. The company’s diversity helps them be more efficient and empathetic in their approach to product building. Being a diverse company didn’t happen by accident. “We’ve been conscious of building with diversity in mind from the very beginning,” Kumordzie said.

How can you use your company’s differences to succeed?