Press Release

Thatch Announces $38m Series a Funding to Dislodge Health Insurance from Employment, Bringing Choice and Affordability to Consumers

Issued by Thatch

Sept. 6, 2024

Employers don't want to choose employees' health plans. They want to offer high quality plans at a reasonable cost. Thatch makes that possible.

Investment from Index Ventures and General Catalyst will accelerate growth and product development

SAN FRANCISCO -- Thatch, a personalized health benefits platform for forward-thinking businesses, today announced it has raised $38 million in Series A funding. The 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 away the complexity of the Individual Coverage Health Reimbursement Arrangement (ICHRA) law, which passed in 2020, allowing employers to provide tax-free dollars for employees to purchase their own health insurance plans. By combining fintech and healthtech solutions, Thatch has created a user-friendly interface that simplifies the complex process of healthcare benefit management for both employers and employees.

"There's finally momentum towards a health insurance market that serves real people's needs," said Chris Ellis, CEO and co-founder of Thatch. "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."

Historically, health care benefits were selected and offered by employers as a retention incentive. This doesn't work for today's job market where the number of gig workers is on the rise and Americans are more transient than ever. Most people stay in jobs for less than 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. Further, employers are facing rising health care costs which lead to rising out of pocket costs for individuals.

Since launching in 2023, Thatch has helped hundreds of companies across every sector of the economy improve their healthcare coverage while curbing costs. Customers range from AI startups and small businesses to nonprofits and large enterprises with thousands of employees.

"We are excited to back the Thatch team as they reimagine the future of health benefits," said Alex Tran, Managing Director at General Catalyst. "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."

"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," said Jahanvi Sardana, Partner at Index Ventures. "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."

Key features of Thatch's platform include:

• Simplified budget setting and fund allocation for employers
• Personalized plan selection tools for employees
• Integration of tax incentives and credits
• Cost savings through pooled buying power

The funding will be used to expand Thatch's team, continue to scale 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.

"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," added Adam Stevenson, Co-Founder at Thatch. "We're building towards a future where every company, regardless of size, can offer top-tier health benefits to their employees."

For more information about Thatch, visit https://thatch.ai/.

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