Company name: FeatherPay
Number of employees: 4
Headquarter location: Atlanta
Year founded: 2021Year acquired: 2024
Vertical market: Healthcare
The application developer’s journey from a nascent startup to a successful acquisition is a testament to innovation, perseverance, and strategic decision-making. Such was the case of FeatherPay, an Atlanta-based fintech startup that went from creation to acquisition in roughly three years. Like most stories of this type, FeatherPay’s journey is unique. Still, the experiences of the company’s CEO and Co-founder, Craig Haynor, and the story of FeatherPay hold some lessons that will be valuable to developers and entrepreneurs alike.
The idea for FeatherPay came from an insight gleaned from a failed ecommerce technology and services business. If we take a time machine back 15 years ago, ecommerce looked much different than it does today. Platforms like Shopify and Magento didn’t have the popularity or power they do today, which meant there were plenty of companies vying for their piece of the ecommerce platform pie. Haynor joined one of those organizations in its infancy. For many reasons, he explains, after about eight years, the company just could not gain scalable traction. After cycling through two CEOs in a year, and a failed turnaround attempt, the Board began a process to shut down the business. Part of this included asking Haynor to take over as CEO and guide the difficult task ahead. “They asked me to do two things,” he recalls. “First, gracefully wind the business down, being respectful of its customers, vendors, partners, employees and investors as best we could. The second was to see if anything of value within the company’s IP could be sold or repurposed.”
Identifying the Right Niche for Your Application
Through its up and down journey, the company stumbled upon a unique niche of healthcare companies seeking to sell product directly to patients via ecommerce. Accomplishing a direct-to-consumer transaction like this required the understanding and application of HIPAA and patient privacy considerations into both software and services. One of these companies was a large medical device company that could not figure out how to compliantly build such a platform themselves. “They hired us to build something unique in healthcare – a system that could securely handle sensitive patient data while also processing payments in highly customized ways,” Haynor explains. “This wasn’t something you could just buy off the shelf.”
Within that healthcare payments knowledge and experience, Haynor identified an area of the company’s business that might contain potential value. He also had some other ideas related to how data could be compliantly transmitted for healthcare use cases in a HIPAA and ecommerce world.
However, these were just ideas. To help test their legitimacy, Haynor and the small team he assembled purchased marketing lists that comprised thousands of various healthcare services companies. “We targeted healthcare practices that offered elective experiences where health insurance didn’t always come into play: dentists, optometrists, audiologists and similar practices where the patient is covering much of the cost with a cash or credit card payment,” he says.
Outbound marketing campaigns were sent containing broad statements and subject lines related to the few ideas the group had. The goal was to see which ideas, if any, resonated with these groups.
The messages that received the most interest focused on payments and the customer/patient experience. “As patients ourselves, the results made complete sense,” he shares. “It’s a really clunky experience when you go to make a payment at one of these providers. Consumer-friendly options like PayPal and Apple Pay are nearly non-existent, and patient financing is a separate workstream for the office and patients. What a mess.” Soon, the group began asking, “What would it look like to productize the healthcare payment experience for practice staff and to make it more consumer-centric for patients?”
After two days of whiteboarding, ordering pizzas and drinking lots of coffee, the team created a loose vision of a payments product targeting the Dental health market.
“I went to the failing business’s Board and major investors and explained that we had an idea and wanted to run with it, but under a new company and cap table,” Haynor says. “We liked working with the previous stakeholders, but, ultimately, you need a clean break to move on. We wanted to create a structure and incentives to allow a new team to pivot and attack this opportunity.”
Ultimately, Haynor’s team and the stakeholders reached an agreement. In 2021, Haynor became the CEO and co-founder of the new company, FeatherPay, which set out on a bold mission to create healthcare’s best payments experience.
Outside Investment Lessons Learned
Most startup stories contain chapters on early-day finances and the drama often associated with bootstrapping or bringing in outside investors. FeatherPay is no different.
“One of my early missteps was in investor selection,” Haynor reflects. “While we sought healthcare industry expertise, what we really needed were investors who understood the startup journey. First-time investors, unfamiliar with the realities of building a company, often struggled during challenging periods. Without that experience, they couldn’t contextualize the constant existential threats that every startup faces. It turned out we needed their intestinal fortitude more than their industry experience.”
“When you’re running out of money and battling entrenched competitors, you need investors who’ve seen this movie before,” he continues. “The flashy headlines about unicorns-to-the-moon can create dangerous and unrealistic expectations. Instead of providing steady support during tough times, a few inexperienced investors questioned everything about the business – consuming valuable time and energy when we needed it most.”
The Value of a Good API
From day one, FeatherPay’s product strategy was to build and refine its APIs. Haynor shares two reasons for this decision.
First, the company wanted APIs it could consume itself, allowing FeatherPay to rapidly build and deploy solutions and design UIs in an aggressive pursuit of product-market fit.
Second, the company wanted the ability to sell the product’s features and capabilities to other technology platform companies via APIs. As recent research shows, more software developers now consider APIs products and build them into their revenue growth strategies. “I’m really proud of the work our team did with our APIs,” he says. “Fast forward to today and our APIs serve numerous technology platforms and use cases, and we can iterate our technology significantly faster than I observe with our competitors.”
The Road to Acquisition
“Eighteen months in, we hit the turbulence typical of early-stage startups. We paused for a critical reset – cutting costs, refining our strategy, and questioning everything,” Haynor explains. “But what emerged from this stress test was clear validation. Despite cash constraints, our core metrics told a compelling story: growth in customer acquisition, near-zero churn, and high user engagement in the product. By leveraging our strengths in speed and service, we were even winning major accounts from our largest competitor. It was working.”
Agnostic Payments, Willingness to Customize
A significant factor in FeatherPay’s journey from startup to acquisition was the company’s ability to quickly build and innovate on creative payment solutions for its healthcare-related customers. Craig Haynor, CEO of FeatherPay (now iCorePay, a division of iCoreConnect), credits Datacap Systems for a part of that success.
“We made Datacap one of our preferred gateway partners due to their agnostic nature and approach to downstream processor support,” says Haynor. Being agnostic means Datacap is not tied to any specific payment processor or acquirer. This means that it can work with multiple payment methods, hardware and providers, giving businesses more flexibility and control over their payment processing. Benefits can also include lower costs and reduced risk of downtime or service disruptions.
Additionally, Haynor points to Datacap’s ability to be flexible and build capabilities necessary within FeatherPay’s unique niche. “When we first started exploring our relationship with Datacap Systems, there were some features that just didn’t operate the way we needed them to,” he recalls. “We submitted a wish list of things we needed, but had the expectation that they wouldn’t get done or would take a long time. In the meantime, we’d have to use other solutions and workarounds. However, Datacap has delivered in terms of the time and results for our key requirements.”
Haynor says Datacap’s nimble nature helped FeatherPay score quick wins with customers needing immediate customizations. Separately, he says Datacap has long-term plans and strategies with realistic timelines that allow all parties to manage future innovations and rollouts.
“With Datacap, you can go back to what really matters with partners, and that’s speed and service,” Haynor says. “Datacap believes and lives that fundamentally as a philosophy within their business.”
With those facts in hand, the company raised additional capital to run hard for another two years. At the same time, Haynor started getting inbound inquiries from potential acquirers. “In my experience, most M&A solicitations are from competitors who are just looking to pump you for information,” he says. “We had plenty of those over the years. However, as a founder/CEO, one has a responsibility to take those calls.”
Despite some acquisition interest, the stakeholders in FeatherPay now had confidence in their product after going through the recent reset and capital raise. Being acquired wasn’t on anyone’s mind. “Our vision was always to be the best payment experience in healthcare. We knew what we had built, and we believed in our ability to deliver on that mission. We leaped out of bed in the morning and fell back into it every night with that singular mission on our minds – to be the best.”
While all this was going on, a company called iCoreConnect was evaluating another healthcare-related software product and was impressed with its payment features. Upon investigation, iCoreConnect learned that the application’s payments were powered by FeatherPay’s APIs, so they introduced themselves to FeatherPay.
“At this point, I had been to the altar a few times with a couple of potential acquirers, and I had very little interest in having these conversations,” recalls Haynor. “Again, we were very excited about where we were heading, but I took the call because a good friend and business partner who I greatly respect asked me to.”
The call changed the trajectory of FeatherPay. “The first thing we discussed was how we each saw the world of technology evolving. We discussed what’s going to look the same and what’s going to be different. We discussed how we were each uniquely positioned. Most importantly, I wanted to understand the essence of the people I was talking to.”
“We made Datacap one of our preferred gateway partners due to their agnostic nature and approach to downstream processor support.”
Haynor contrasts this conversation with other potential suitors. Most of those M&A conversations were led by managers of older companies. In many cases, he says, these people were multiple generations removed from the founders who started the company. With iCoreConnect, he was talking with the people who built the company—people who understood how hard it is to bring something of significance into a chaotic world.
Through an acquisition, FeatherPay could provide iCoreConnect with a fintech solution to add to its growing healthcare application portfolio. In exchange, iCoreConnect offered FeatherPay a rocket ship to take the product further and faster than it could do on its own. “As a team, company and stakeholders, we had to have conversations about the two options on the table. Do we stay independent and keep grinding, or do we get tucked under the wing of a strategic buyer? The key question I posed was: which path will allow us to make the greatest impact on our vision in the shortest amount of time while balancing a successful outcome for employees, their families, our customers and investors?”
On Jan. 1, 2024, FeatherPay was acquired by iCoreConnect. “Most deals don’t happen, but when they do, it feels great,” exclaims Haynor. “Our whole team has remained intact with the acquisition. All the blood, sweat and tears we and our supporters put into making FeatherPay what it is have been worth it.”
FeatherPay Becomes iCorePay
Haynor and his team became part of a new fintech division within iCoreConnect, and rebranded FeatherPay to iCorePay. As a testament to the synergies between the companies and the alignment of all the key stakeholders, the old FeatherPay group operates within the controls of iCoreConnect but is given the freedom to let their creative juices and energies flow. “They’re mostly hands off, but with arms around us if we need support,” says Haynor. “It feels like two entrepreneurial groups came together in all the best ways.”
Today and going forward, the mission for Haynor and his team remains the same: deliver exceptional financial technology solutions that streamline payment and billing processes and enhance the overall experience for healthcare providers and patients. “Whereas once we were just a scrappy small startup with no advantage other than speed and service, we now have a brand behind us, and we’re doing things faster and better than we could have on our own,” he concludes.
