Small and medium-sized enterprises (SMEs) have been struggling for decades with the opportunity to offer their employees health insurance.
Sana, a startup that wants to make health insurance plans more affordable for these businesses, has raised $ 60 million in B-series funding.
Trust Ventures and Gigafund co-led the Austin-Texas-based startup, which raised up to $ 107 million since its inception in 2017. Existing supporters include American Family Ventures, mark vc, Breyer Capital, JAM Fund and Liquid 2. The company declined to disclose its estimate, saying only that it “doubled” after the $ 20 million Serie A extension last October.
Simply put, Sana’s mission is to offer “better and more affordable” health plans to small and medium-sized enterprises. He claims that it saves companies up to 20% compared to their current health insurance.
“Our plans cover everything health insurers do, including free visits to next-generation virtual care services in primary care, mental health, pediatrics and motherhood,” said co-founder and CEO Will Young.
Sana offers its plans in eight states, including Arizona, Oklahoma, Texas, Illinois, Ohio and Kentucky. After recently expanding to Virginia and Indiana, he plans to use his new capital in part to move to new states in the coming months.
Its target customers are not only small businesses that already offer health insurance plans, but also those that previously could not afford to provide health care to employees, according to Young. He estimates that 35-40% of his new customers are such companies.
Most customers receive a 0% increase in renewals, which Young says is a rarity in the industry and has low co-payments.
Sana has about 20,000 people in its health plans today and has tripled its number in the last year, he said. These include Bishop Cider, Ben Hogan Golf and BrewBike, among others.
“We’re not profitable yet, but we plan to get there with this round of funding,” Young told TechCrunch.
According to him, the company’s model is unique because of its vertically integrated approach. He makes money by charging fees for various services related to selling, taking over and administering health plans. In addition, it earns income from insurance risk.
In January, Sana opened its first primary care center, called Sana MD, for its members in Austin. Concierge care at the center is available to its members in most plans for free, according to Young.
It should be noted that Trust Ventures and Gigafund have been investors in Sana since the company’s initial round in 2019. The latter led four separate rounds of investment in the company because “the team continues to impress with its phenomenal vision and performance,” they said. Stephen Oscowie, managing partner of Gigafund, in a written statement.
Salen ChuriFounder and CEO of Trust Ventures, believes that Sana’s strengths lie in its ability to leverage a “huge network of suppliers” and “provide access to cutting-edge digital technologies for health and wellness – all at a lower cost to the small business from inherited health insurance. “
In addition to expanding into new markets, Sana plans to use its new capital to hire employees in its operations, advocacy, sales and marketing teams. It also plans to open more primary care centers in additional locations, according to Young.
Currently, the remote first Sana has 170 employees, compared to 80 in early 2021.
The insurance technology sector has had its ups and downs lately. Publicly traded companies in the area are still struggling, while other start-ups are cutting, and others are also raising new capital on unicorn ratings.