Thatch, the health benefits platform helping employers move away from one-size-fits-all group health plans, and toward a model that puts spending decisions in employees’ hands, has closed $108m in new funding, taking its valuation to $1bn.
The round was led by The General Partnership, Index Ventures, General Catalyst and Andreessen Horowitz, with additional backing from ADP Ventures, Paychex, Eli Lilly and Company, Scale Venture Partners, QuantumLight, SemperVirens, Quiet Capital and Avid Ventures.
The raise comes on the back of rapid growth for the business, with revenue climbing close to sevenfold over the past 12 months. More than 5,000 employers have now adopted the platform as they look for alternatives to the standard group plan, which the company argues is rarely suited to the needs of every individual employee. That uptake, Thatch says, points to a wider rethink taking place among employers about how healthcare benefits should be structured and delivered.
Much of that rethink stems from a mismatch employers are increasingly grappling with: healthcare costs keep climbing, yet a single plan built for an “average” employee tends to leave gaps for everyone else. Thatch’s approach flips the usual process, moving employers away from selecting one blanket plan and instead handing staff a set budget along with the freedom to pick coverage suited to their own circumstances.
Under Thatch’s model, employers allocate a fixed, tax-free healthcare budget, which employees then put toward an individual plan that matches their needs, whether that is their existing doctors, prescriptions, family circumstances or a particular style of coverage. Any budget left over can go toward other eligible costs such as GLP-1 medications or therapy. For employers, the arrangement brings more predictable healthcare spending, while shifting the actual purchasing choice to the person who will use the care.
Beyond insurance itself, the company sees this approach reshaping how healthcare spending works more broadly. It points out that healthcare ranks among the biggest expense categories for both households and employers in the US, despite individuals traditionally having minimal say over how that money gets spent. Thatch positions itself as building the infrastructure needed to bring healthcare in line with other consumer sectors, where people work within a budget, weigh up options and choose what suits them.
To support that shift at scale, Thatch has built connections with major health insurance carriers, payroll providers and benefits platforms, linking employers and employees to individual coverage options. Its distribution network includes tie-ups with ADP, Paychex, Gusto and QuickBooks, allowing employers to adopt a consumer-directed approach without overhauling their existing benefits set-up.
Thatch co-founder and chief executive Chris Ellis said, “For too long, healthcare has been the one major purchase in someone’s life they never actually got to make.
“Give people control over their own healthcare dollars, and the first thing they do is ask what something actually costs. That’s the behavior change this round is built to scale.”
Index Ventures partner Jahanvi Sardana said, “Every massive consumer market eventually gets rebuilt around the individual – Amazon did it for retail, Expedia for travel, Robinhood for investing. Thatch is doing it for healthcare.
“With AI, the end state is bigger than shopping: an agent that knows you, holds your wallet and can find, book and pay for the right care. The magic is that you stop navigating healthcare and start being taken care of.”
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