Centivo, a startup that sells health insurance to employers, raised $75 million in fresh funds months after it bought a virtual primary care startup to use in its offerings.
The startup’s goal is to offer a more affordable health insurance alternative to employers, lowering costs for both them and the amount employees have to pay out of pocket.
Investors have been pouring big money into insurance options beyond those offered by traditional big health insurers. Devoted Health, a startup that sells Medicare Advantage plans, raised $112 million in August to push into new states, Endpoints News first reported. Fellow employer-focused health insurance startup Sidecar Health raised a $165 million Series D round in June.
New investors in the startup include Cone Health Ventures and California-based MemorialCare Health System’s investment fund. Existing investors B Capital, Cox Enterprises, F-Prime Capital Partners, Ingleside Investors and JP Morgan’s healthcare venture Morgan Health all chipped in as well. The $75 million investment also included debt funded by Trinity Capital and JPMorgan Chase. The startup has raised $225 million since its founding in 2017.
Over 75% of patients on Centivo plans spend under $200 a year on their healthcare expenses, CEO and founder Ashok Subramanian told Endpoints.
“Most employers believe that costs are going to go up, there’s nothing they can do about it and open enrollment becomes the announcement of the annual pay cut at every company in America,” Subramanian said. “We’re here saying that there’s an opposite story that needs to be told.”
The startup currently serves over 160 companies in 14 states, including companies like Wells Fargo, Ralph Lauren and United Airlines. After Centivo bought virtual primary care startup Eden Health in May to expand its reach and include its services as part of its health plan, it’s now offering virtual primary care in 22 states. The company plans to launch a new service later this year, in which a behavioral health clinician will be attached as part of patients’ usual virtual primary care team.
It plans to use the new investment to expand its coverage and fund purchases that would automate and streamline its internal workflow as it expects to double its business next year, Subramanian said, as Centivo has doubled the number of clients it works with and its revenue from the past year.
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