Durham-based healthcare staffing startup Matchwell has been acquired by Omaha-headquartered Medical Solutions for an undisclosed amount earlier this month.
Although Matchwell Founder and CEO Robert Crowe couldn’t say how much the deal was for, he compares the aftermath of the deal to “playing Santa Claus” with his investors and 62 employees, who all received equity checks. (Note: we first profiled Matchwell last February.)
Crowe said the acquisition provides Matchwell the resources and infrastructure to scale across the United States. Instead of accepting high levels of additional venture capital, Crowe said the deal was the right choice, as it will help leapfrog industry competitors more efficiently.
“Now we can go fast,” Crowe said. ”This makes Matchwell a viable solution for every healthcare system in the country overnight.”
Medical Solutions is a leading provider of workforce solutions for the healthcare industry, while Matchwell has made a name for itself as an AI-enabled marketplace and SaaS solution that matches licensed staff with healthcare organizations across clinical settings. The startup currently has more than 50,000 on-platform clinicians and more than a thousand sites of care under contract.
“Matchwell’s long-standing reputation of innovation, providing customers with progressive solutions, and employee-centric culture mirrors what we’ve established at Medical Solutions,” said Craig Meier, CEO of Medical Solutions, in a statement. “The acquisition of Matchwell aligns with our growth strategy and our vision of leading our industry. Matchwell’s emphasis on purpose and passion means the addition of the company’s operations, management team, and talented staff will complement our human-first approach. Together, we’ll deliver on our purpose of connecting care at even greater levels than we are today.”
When Matchwell was first launched in 2019, it already had something setting them apart. Crowe had lived the pain point they were solving for 20 years in the staffing industry. As the nation’s first subscription model for hiring temporary workers, the platform was able to do everything a staffing company does but with users at the forefront, prompting greater efficiency.
“So often, early-stage companies come up with an awesome idea, amazing technology, but they haven’t lived the pain firsthand,” Crowe said. “So then they spend the first several years trying to figure out, well, how do we sell this or how do we quantify the value. We didn’t have that problem because we lived the pain.”
Turning down funding at sky-high valuations
By the time Matchwell had gained traction, growing from $67,000 to more than $3 million in revenue from 2020 to 2021, several California venture capitalists were taking note. Crowe said he initially made the mistake of letting them woo him, as they threw out multi-hundred-million-dollar valuations for a $3 million-in-revenue company.
Crowe said he was lucky, ultimately deciding not to accept their money.
“It just felt like, how on Earth does one live into those valuations?” Crowe said. “What happens if you don’t? There’s not a lot of conversations in magazines about entrepreneurship about that. Everybody just talks about getting the valuation. They never talk about then having to live into it—and what happens when you don’t.”
Instead, Matchwell raised less money (a total of $11.5 million) and pursued gradual growth, positioning themselves well for a powerful exit, Crowe said.
The startup was by no means looking to be acquired, but they were on the hunt for a financing partner. They wanted someone who would do more than just write a check, who could truly support Matchwell as a company.
“A lot of these financing partners, they could write a check, but they didn’t really know how to help,” Crowe said. “They didn’t know how to roll up their sleeves. They weren’t operators. They didn’t have a network to actually help us. They all said that they were different, they all said that they wanted to help, but when you really pressed them on it, they couldn’t explain how they were going to do anything.”
After Matchwell started engaging with Centerbridge, a New York-based private equity firm that had just partnered with Canadian pension fund CDPQ, the stars seemed to all align. CDPQ had just acquired Medical Solutions, a multi-billion-dollar healthcare staffing company that Crowe knew could allow Matchwell to plug half a million clinicians into their platform overnight.
“It’s like they’re the Blockbuster infrastructure, I’m the little new Netflix and we found a nice balance where we both went together,” Crowe said.
The primary reason Crowe started Matchwell was to solve the problems the healthcare industry faced in hiring, he said, so he knew that the infrastructure Medical Solutions had would be pivotal in getting Matchwell to the next level. Matchwell had sold over a thousand subscriptions in less than three years, and they needed to be able to execute.
“There was no way I was going to be able to scale faster without that infrastructure,” Crowe said. “If I can’t deliver, what’s the point?”
As the acquisition gets underway, Matchwell is by no means losing any employees. In fact, it’s looking to double its headcount by near the end of the year and will continue operating mostly as a separate entity.
Crowe said the cost savings impact Matchwell can have in the healthcare industry has only been fast-tracked, and he looks forward to Matchwell becoming a household name for every healthcare organization in America over the next few years.
“In 2019, we set an initial goal to save the healthcare industry a billion dollars a year,” Crowe said. “This just puts that on steroids. So now, the question is, how many billions can we remove out of the healthcare system because of a more efficient model?”