Insurance startup Bright Health closed its largest funding round to date, with plans to expand its footprint in 2020.
The Minneapolis-based insurer announced it raised $200 million on Thursday in an “oversubscribed" series C, meaning it raised more money than intended.
Bright Health has raised $440 million since it launched in 2016. The latest round included new investors from Meritech Capital and Declaration Partners.
The company said the new investment would “grow the company’s balance sheet and support ongoing expansion into new markets at a pace expected to exceed Bright Health’s growth in 2019.”
Bright Health announced a significant expansion over the summer, adding new Affordable Care Act marketplace plans in Arizona and Tennessee on top of its existing presence in Colorado and Alabama. The insurer has also entered the Medicare Advantage market in six states, including new markets this year in New York, Ohio and Tennessee.
The insurer’s unique model works with a single health system in each market, creating a hyper-narrow network and that integrates technology and analytics.
Craig Sherman, managing director at Meritech Capital Partners, said the company's “above-average re-enrollment rates” along with the “data infrastructure” to improve health outcomes attracted the venture firm. A recent survey by Venrock Health showed 23% of respondents regretted not getting into the company’s early stage financing.
In 2017, Bright Health was named to Forbes' list of “next billion-dollar startups.”
“Bright Health has continued to execute at a fast pace towards our goal of disrupting the old healthcare model that places insurers at odds with providers,” CEO Bob Sheehy said in a statement. “With our recently announced expansion, we will triple our geographic footprint in 2019. And Bright Health’s current high re-enrollment rate shows that consumers are ready for this improved healthcare experience—especially when it is priced competitively.”
Other investors in the latest funding round include New Enterprise Associates (NEA), Flare Capital and Andy Slavitt’s Town Hall Ventures.
“I remain awestruck by the achievements that Bright Health has made since the company’s series A financing in 2016,” Mohamad Makhzoumi, general partner and head of healthcare services and healthcare IT investing at NEA, said. “Bright Health is the entrant with the best chance of upsetting the staid status quo of the managed care industry.”