Collective Health, a startup that provides tools to help companies with their employer-provided insurance, announced that it raised $81 million in a new round of funding led by Google Ventures. The company, which is based in San Mateo, California, plans to expand to outside of its home state next year.
While the health insurance industry is among the most challenging businesses to break into, the Affordable Care Act and the rise of consumerism has created opportunities for startup companies trying to elbow their way in, as FierceHealthPayer previously reported.
The start-ups are offering various alternatives. Oscar, which is valued at $1.5 million, focuses on trying to make buying health insurance easier for consumers. Clover Health is unique among the startups in that it targets Medicare beneficiaries and wants to harness claims data and use technology to improve clinical outcomes for older patients. One of the newest, HoneyInsured, uses data analysis to guide individuals' coverage purchases and ensure they choose the right health plan.
Collective Health has now raised $119 million as it seeks to expand. In addition to the new support of Google Ventures, its existing backers include New Enterprise Associates, Founders Fund, Maverick Capital, Redpoint Ventures and RRE Ventures, the New York Times reports. It is working with insurers such as Anthem and Blue Shield of California.
In 2016, Collective Health says it will serve 30,000 members and process more than $200 million in health insurance claims. By expanding to companies across the country, it is on track to process more than $2 billion in claims in 2017, the company says in its announcement.
"We're working to shift the focus of health insurance from profits to people," Ali Diab, CEO and co-founder, said in a statement. "This significant infusion of capital comes at the perfect moment, enabling us to make our solution available to companies across the U.S."