- Collective Health, a startup that works with employers to provide health insurance to their workers, just raised $205 million in a round led by SoftBank’s Vision Fund.
- The company helps employers build out health plans that fit their needs by adding technology with the hope of making things like submitting claims and reading bills easier.
- The funding will be used to build out Collective Health’s technology platform, as well as its geographic footprint.
- Click here for more BI Prime stories.
Over the past few years, healthcare startup Collective Health has become a favorite of Silicon Valley companies like eBay and Palantir, who are using its tools to manage their employees’ healthcare benefits.
On Monday, Collective Health raised $205 million in a round led by SoftBank Vision Fund, the world’s largest tech investor. The Vision Fund, which is invested in companies like WeWork and Slack, has made bets on healthcare companies in the past including pharmaceutical company Roivant and biotech Relay Therapeutics.
Collective Health has raised about $435 million in total from investors including Founders Fund, NEA, and GV, which all invested in the latest round. New investors DFJ Growth and PSP Investments joined in on the round as well. Collective declined to comment on its valuation.
Collective Health covers about 200,000 members, mainly employees and their spouses and children from companies like Zendesk, Uber, Palantir, eBay, and Pinterest.
The new funds will help Collective Health build out its technology platform and expand its geographic reach beyond its mainly California footprint into new markets nationally. It’s based in San Francisco, and has also opened offices in Chicago and Lehi, Utah.
Collective Health helps companies manage their healthcare benefits, replacing traditional health insurers. It offers online tools for executives to monitor healthcare spending and an app for workers to find a doctor or check their coverage. The goal is to help companies reduce costs and provide a better experience for their workers using updated technology.
"Literally every industry’s found a way to modernize," Rajaie Batniji, a co-founder and chief health officer, told Business Insider. "We’re still stuck in fax machines."
Collective Health works with companies that pay directly for their workers’ care, known as self-insured employers. In the US, more than half of the non-elderly population is covered by an employer-sponsored plan, and almost 80% of large companies are self-insured .
Scott Nolan, a partner at Founders Fund and board member at Collective said that his firm initially invested in the company’s series A in 2014 because of Collective’s approach to tackling healthcare from the perspective of employers.
"If you want to fix this one of the good ways to do it is to go after the employer side," Nolan said.
- The VC’s ultimate guide to sniffing out risky healthcare startups — and not getting tricked into backing them
- We got a look at the slide deck of Bind, a startup that’s raised $70 million to upend the way we pay for healthcare
- After a devastating failure, the CEO of the largest health system in New York wants to get back into the health insurance business