Arlo, an AI-based health insurance underwriter for small businesses, announced $4 million in seed funding led by Upfront Ventures, with participation from 8VC and General Catalyst.
Within the first year, the company has already written mid-eight figures in premiums, working with industry-leading reinsurers, including Nationwide to deliver innovative health plans that prioritize long-term health outcomes over short-term care denials.
Health insurance premiums have been increasing substantially, continuing a decade-long trend that has seen costs rise 49%, outpacing general inflation. And small businesses, which employ nearly half of America’s private workforce, have been hit especially hard, often forced to choose between absorbing unsustainable costs or shifting the burden to employees through higher deductibles.
The impact on employees is extreme with delayed medical care, unexpected claim denials, hours spent battling insurance bureaucracy, and growing frustration with a system that seems designed to restrict rather than enable access to care. While large employers utilize their size to negotiate better rates and customize their health plans, small businesses lack this bargaining power and are left with few options from legacy carriers.
Arlo offers affordable and self-funded health insurance coverage for small and mid-sized businesses, built on value-based care and cost transparency. Our AI-enabled underwriting technology allows us to create a new model that:
— Rewards preventative care to keep employees healthier and costs lower
— Aligns incentives so employers, employees, and providers all benefit
— Identifies risks early for proactive, better health outcomes
The company’s growth has been driven by strong partnerships with leading benefits firms and a team bringing together expertise from Palantir, Finch, Gusto, and WTW.
With this new funding round, Arlo will advance its mission to bringing affordable, high-quality, long-term oriented benefits to small businesses across the country.
KEY QUOTES:
“The challenge in healthcare isn’t just rising costs—it’s misaligned incentives. By building new risk transfer and AI-driven underwriting infrastructure, we’re creating a system where investing in preventive care and health initiatives delivers both immediate savings and long-term stability for small businesses.”
– Jan-Felix Schneider, Co-Founder and CEO of Arlo
“Upfront is thrilled to support Arlo as they tackle one of the most pressing challenges in healthcare. With their underwriting technology, easy-to-use quoting for brokers, and a deep understanding of the small group market, Arlo is uniquely positioned to transform how small businesses access and manage health benefits. At a time when frustration with legacy carriers is high, Arlo is the right company at the right time to take on this $275 billion market opportunity.”
– Kevin Zhang, Partner at Upfront Ventures
“Arlo has assembled a stellar team of disruptors and deep expertise to tackle this space, and we’re excited to be part of the journey.”
– Sebastian Caliri, Partner at 8VC
