San Mateo, California-based Collective Health, a self-insurance platform provider, has raised $38 million in Series B funding. Founders Fund and New Enterprise Associates led the round with participation from Formation 8, Redpoint Ventures, RRE Ventures, Subtraction Capital and Rock Health.
SAN MATEO, Calif. – March 18, 2015 – Collective Health, an emerging leader in employer-sponsored health insurance, announced today that it has raised $38 million in funding with the recent close of its Series B financing. The company’s funding has been led by Founders Fund and NEA, with participation from Formation 8, Redpoint Ventures, RRE Ventures, Subtraction Capital and Rock Health. This investment enables Collective Health to meet the rapidly growing demand for its employer self-insurance platform.
150 million Americans currently receive health insurance coverage through their employer. Despite the failure of traditional health insurance plans to meet employers’ needs and the growing expense of those plans, the fixed costs and logistical challenges of switching to self-insurance have kept many American employers unnecessarily locked into fully insured health plans. By leveraging the latest in cloud-based software technology and data science, Collective Health is democratizing access to self-insurance for the majority of American companies, while delivering a member experience to their employees that rivals the world’s top service brands.
“Recently, a lot of attention has been paid to making individuals better consumers of healthcare, and health insurance in particular. However, in the United States, employers drive most health insurance purchasing decisions and cover the lion’s share of healthcare costs,” said Ali Diab, Co-Founder and CEO of Collective Health. “With the backing of investors behind such transformative companies as SpaceX and Workday, and by leveraging the latest in cloud-based software technology, UX design and data science, Collective Health has developed the first self-insurance SaaS platform for American employers to sponsor their employees’ healthcare on their own terms, without the need for a traditional health insurance plan.”
Already, Collective Health has demonstrated the dramatic benefits that employers can achieve by switching to its self-funding platform, with member satisfaction scores far surpassing traditional health insurance industry benchmarks. In addition, Collective Health brings together medical, pharmacy, dental and vision benefits, underpinned by the country’s top provider networks, in one platform, to simplify the administration of self-insured company health benefit plans. With Collective Health, members and their employers get actionable insights based on real-time health claims data, with intuitive mobile and web interfaces that provide anytime, anywhere access to health plan information and assistance.
“Collective Health represents a fundamental shift within the health insurance industry, allowing more companies to confidently migrate to self-funded programs for employees,” said Mohamad Makhzoumi, Partner and Head of the Healthcare Services and Healthcare IT practice at NEA. “Ali and the team at Collective Health have developed a data-driven technology enabled experience that benefits all parties involved. Employers can minimize the risk that is commonly associated with self-funding, while their employees can take control of their healthcare with excellent UX design and mobile management. I’m overjoyed to partner with Collective Health to change the way companies provide, and employees access, healthcare.”
About Collective Health
Collective Health is redefining employer-sponsored healthcare. Using Collective Health’s self-insurance platform, organizations and their consultants can design, administer and optimize employee health benefit programs harnessing the power of data science and technology in ways that have simply not been possible to-date. Founded in October 2013, Collective Health is currently serving California based employers, and will be expanding its geographic coverage nationally starting in 2015. The company is based in San Mateo, CA.
For more information, please visit www.collectivehealth.com.