Thatch, an employer-focused health benefits platform, announced it secured $38 million in a Series A funding round led by General Catalyst and Index Ventures. 

New investors SemperVirens and the General Partnership participated in the round, as did existing investors Andreessen Horowitz (a16z) and Avid Ventures.

WHAT IT DOES

Thatch offers employers ICHRA benefits plans that allow them to set a monthly allowance for employees to spend on the benefits they choose.

Employees choose the plans available in their area based on their needs, and employers pay a set dollar amount each month for each employee.

The California-based company will use the funds to expand its workforce, speed up growth and scale its technology. 

"We are excited to back the Thatch team as they reimagine the future of health benefits," Alex Tran, managing director at General Catalyst, said in a statement. 

"In the last year, we've seen them hire incredible talent, garner a ton of customer love and ship products quickly. Thatch offers customers a strong value proposition: employees get greater choice and quality on healthcare; employers get more visibility on spend. In the long-term, we hope Thatch helps bring us a step closer to a more ideal version of American healthcare, one driven by fundamental market forces like quality, transparency, and cost."

MARKET SNAPSHOT

Numerous digital health companies focus on the employee benefits market.

Personify Health offers health, navigation, benefits and wellbeing experiences, alongside data-driven personalization. Personify was formed due to a $3 billion merger between mobile-first employee wellness and engagement company Virgin Pulse and benefits and analytics platform HealthComp.

Other companies include employer-focused digital mental health provider Lyra Health and virtual healthcare and care and benefits navigation company Accolade.

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