Report: Tech-savvy health insurer Oscar is raising another $150M at a $3B valuation

By Jonah Comstock
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Oscar is raising another round of at least $150 million that could raise its valuation to $3 billion, according to a report over at Fortune. Fidelity is the lead investor, Fortune is reporting.

A digital-saavy upstart health insurer, Oscar has already raised $365 million, including a $32.5 million investment from Google Capital last fall and a $145 million round last spring from Peter Thiel and Brian Singerman from Founders Fund with participation from Li Ka-shing of Horizons Ventures, the Wellington Management Company and Goldman Sachs. Khosla Ventures and General Catalyst have also invested in the past.

As a small newcomer in an industry dominated by large, longstanding players, Oscar has attempted to differentiate itself with a positive user experience, proactive customer engagement, and an inclination to move beyond the traditional role of the health insurer -- which often means incorporating digital health technology. Early on, Oscar partnered with Teladoc to bring telehealth services to members.

"We add some novel elements where we try to move away from someone who is just a claims processor or the pipes, but be more like a go-to and a doctor in the family," co-founder Kevin Nazemi said at an event in Boston in 2014. "That manifests itself in the ability for all our members to push a button and have a doctor call them back in seven minutes."

In December 2014, the company also delved into wearables, teaming up with Misfit to get more of its members moving. As part of the deal, each Oscar member gets a free Misfit Flash tracker and the opportunity to earn up to $20 a month in Amazon.com credit by meeting step goals. The partnership means Misfit gets exposure for its newest wearable on a few thousand New York wrists, while Oscar hopefully lowers the healthcare costs of its members and continue to differentiate itself as an innovative player in the insurance market.

Oscar, itself, has a mobile app that includes step tracking, a doctor finder, access to health history, and the doctor on call feature. The app also connects to Apple Health.

The company has grown quickly in recent months and now counts 125,000 covered lives across New York, New Jersey, Texas, and California.

"We realized early on that the only way to achieve change is to consistently choose the most challenging path imaginable," the company wrote in a recent blog post. "We went ahead and built the first new health insurer in states like California and New York in over 15 years. With 125,000 members in four states across the country, Oscar is the first insurer to give members free televisits, and the first 'viral' health insurer, with a third of new members referred by friends. We hope this is just the beginning."

Over the last year, the company has also hired a number of new executives: COO Kevin Campbell, who comes to Oscar from Accenture, President and CFO Brian West, who came over from Nielsen, and Chief Policy and Strategy officer Joel Klein, who ran the Justice Department’s anti-trust division under Bill Clinton.