Collective Health hauled in $280 million in series F funding led by major insurer Health Care Service Corporation.
The startup has reached a valuation of about $1.5 billion, Bloomberg reported. San Francisco-based Collective Health has raised about $720 million to date.
The funding round was backed by new and existing investors including DFJ Growth, Founders Fund, G Squared, Maverick Ventures, NEA, PFM Health Sciences, SoftBank Vision Fund 1, Sun Life and others.
Collective Health's solution offers employers the ability to manage benefits, costs and members' health in one platform.
Co-founders Ali Diab and Rajaie Batniji launched the company in 2013 to help employers and their workers understand healthcare benefits through a comprehensive app and by administering employers’ health programs. The startup combines leading healthcare networks across medical, dental, vision and other benefits and integrates them into an HR system.
The company's current clients include Activision Blizzard, RH, Pinterest, CrossFit, DataSafe, Jazz Pharmaceuticals, Palantir, Red Bull, Trace3 and Zendesk. Collective Health has more than 500 employees and serves about 300,000 members across more than 55 companies in all 50 states.
Collective Health plans to use the capital infusion to scale its technology platform and services to reach more large employers.
“One of the most significant pain points in our economy and society is the lack of a powerful and flexible technology infrastructure to help people understand, navigate, and pay for healthcare. Collective Health has changed that with our platform,” Diab said in a statement. “This latest round of funding enables us to further our vision of empowering American workers and their families to live healthier lives. By expanding the scope and reach of our platform and partner ecosystem, we can broadly deploy the infrastructure for the next generation of healthcare.”
With its flexible platform, Collective Health offers a growing ecosystem of partners, including medical provider networks, pharmacy benefit managers, virtual care solutions and digital health programs, according to Kirthiga Reddy, partner at SoftBank Investment Advisers.
Collective Health's technology and approach to employer benefits will "transform the employer-driven healthcare economy," Reddy said.
In March, HCSC, a 16 million-member insurer that operates Blue Cross Blue Shield health plans in five states, announced a strategic partnership with Collective Health to bring the tech company's platform to its members. Collective Health's solution will initially be made available to self-funded Blue Cross and Blue Shield customers in Illinois and Texas beginning Jan. 1, 2022. The companies plan to eventually expand into all of HCSC’s markets.
Self-insured groups that opt in are replacing both their systems and member experience with Collective Health's—from adjudicating claims (core adjudication and data management), to bringing together in one ecosystem all of the fragmented virtual care providers, to also serving as both the digital and human customer experience—for HCSC's new and existing customers, according to the company.
“HCSC is committed to offering benefits and support that facilitate a seamless, impactful, and user-friendly healthcare experience for our members and customers,” said Maurice Smith, president and CEO of HCSC, in a statement. “We look forward to working with Collective Health and its innovative digital technology platform to further complement our portfolio of solutions that meet customers’ evolving health care needs.”
With its membership growing 10 times over the last few years and HCSC making Collective Health’s platform available to its members, this latest round of funding will be used to scale Collective Health’s healthcare experience and accelerate adoption to new employers, the company said.
The deal with the insurer will drive Collective Health’s market reach to large employers.
In response to the COVID-19 pandemic, the company pivoted to offer services and tools to support employers' return-to-work strategies. The Collective Go service includes COVID-19 screening, testing and monitoring.
“We at NEA firmly believe that Collective Health is building the essential backbone for the future of healthcare,” said Mohamad Makhzoumi, general partner and head of global healthcare investing at NEA, in a statement.
“This latest investment will help the company continue developing its technology and service infrastructure while creating new market opportunities by expanding the reach of Collective Health’s unparalleled member experience to millions more Americans," Makhzoumi said.