Personalized health benefits platform Thatch announced it has raised $38 million in Series A funding. This funding round was led by Index Ventures and General Catalyst, along with new investors SemperVirens and The General Partnership, with participation from existing investors, including Andreessen Horowitz (a16z) and Avid Ventures. This investment will fuel Thatch’s mission to correct an accident of history and decouple health insurance from employment.
Thatch’s platform abstracts the complexity of the Individual Coverage Health Reimbursement Arrangement (ICHRA) law, which was passed in 2020. It enables employers to provide tax-free dollars for employees to purchase their own health insurance plans. By combining fintech and health tech solutions, Thatch has created a user-friendly interface that simplifies the complex process of healthcare benefit management for both employers and employees.
Health care benefits have historically been selected and offered by employers as a retention incentive. However, this does not work in the job market today, where the number of gig workers has been rising.
Most people stay in jobs for under four years, meaning employees switch or lose access to their health plans every few years and plans are not incentivized to provide care that serves members’ needs in the long-term. And employers are facing significant healthcare costs which lead to rising out of pocket costs for individuals.
Since launching last year, Thatch helped hundreds of companies across every sector of the economy improve their healthcare coverage while curbing costs. The company’s customers range from AI startups and small businesses to nonprofits and large enterprises with thousands of employees.
The key features of the platform include simplified budget setting and fund allocation for employers, personalized plan selection tools for employees, integration of tax incentives and credits, and cost savings through pooled buying power
This funding round will expand the team, continue scaling its technology platform, and accelerate customer acquisition. The company aims to become the default platform for forward-thinking companies to provide health and wellness benefits to their teams.
KEY QUOTES:
“There’s finally momentum towards a health insurance market that serves real people’s needs. We’re seeing interest from employers, brokers, and certainly employees who all recognize the singular opportunity to get high-quality healthcare at a reasonable, transparent cost. With the support of this funding, we’re ready to scale operations to meet the exploding demand.”
-Chris Ellis, CEO and co-founder of Thatch
“We are excited to back the Thatch team as they reimagine the future of health benefits. In the last year, we’ve seen them hire incredible talent, garner a ton of customer love, and ship products quickly. Thatch offers customers a strong value proposition: employees get greater choice and quality on healthcare; employers get more visibility on spend. In the long-term, we hope Thatch helps bring us a step closer to a more ideal version of American healthcare, one driven by fundamental market forces like quality, transparency, and cost.”
-Alex Tran, Managing Director at General Catalyst
“Healthcare is the last major financial decision still controlled by employers but, like the shift from pensions to 401(k)s empowered individuals, healthcare is due for the same revolution. Thatch is driving this shift by harnessing free market forces in the individual market and pooling risk across businesses to create collective buying power. From the moment we met Chris and Adam, their deep market insight and compelling vision were unmistakable. Their relentless execution and ability to attract top talent made us confident they’re building a category-defining company.”
-Jahanvi Sardana, Partner at Index Ventures
“Our vision is to create a healthcare system where employees can maintain great benefits from job to job, and where insurers are incentivized to invest in long-term member health. We’re building towards a future where every company, regardless of size, can offer top-tier health benefits to their employees.”
-Adam Stevenson, Co-Founder at Thatch
