Insurtech company Bright Health scored a hefty $750 million investment from Cigna Ventures, the venture capital arm of insurer Cigna, and longtime investor New Enterprise Associates.

The news comes about a month after the newly public company announced financial results from a "challenging" third quarter, where it posted a GAAP net loss of $296.7 million. But Bright reaffirmed its 2021 guidance of $4.1 to $4.2 billion in revenue earlier this week, and said it expected revenue of more than $6 billion in 2022.

WHAT IT DOES

Bright Health Group includes Bright HealthCare, which sells individual and family health insurance coverage and Medicare Advantage plans, and NeueHealth, which runs clinics and helps partners move to value-based arrangements. 

The insurtech was founded in 2016 with a focus on a consumer-focused and tech-enabled insurance experience, intending to form exclusive partnerships with local health systems in each market.

“The investment from Cigna and NEA signifies continued conviction in Bright Health Group’s alignment model,” Mike Mikan, president and CEO of Bright Health Group, said in a statement. “We are excited about the partnership opportunities for both Bright Health Group and Cigna to bring affordable, personalized healthcare to all consumers.”

WHAT IT’S FOR

The financing, which is expected to close in January, will support continued growth, according to Bright Health. 

Under the terms of the investment, Cigna and NEA will buy $750 million of convertible perpetual preferred stock at a price of $1,000 per share. The stock includes a 5% dividend, which can be converted into common stock shares at a conversion price of about $4.55 per share.

“Cigna Ventures is committed to improving and expanding access to quality, affordable healthcare, and our investment in Bright Health Group aligns with our vision,” Tom Richards, head of Cigna Ventures, said in a statement. “We seek to be partners of choice and we look forward to exploring new ways that NeueHealth and Evernorth can potentially provide services to each other’s customers and clients.” 

MARKET SNAPSHOT

Bright Health hit the New York Stock Exchange in June. Before its IPO, the company had several large fundraising rounds, including a $500 million Series E in September 2020 and a $635 million Series D in December 2019.

In April this year, it acquired telehealth platform Zipnosis. 

Other companies in the insurtech space include Clover Health and Oscar Health, both of which hit the public markets this year.