For decades, small and medium-sized businesses (SMBs) have struggled to offer health insurance to their employees.
Sana, a startup that wants to make offering health insurance plans more accessible to these companies, raised $60 million in a Series B funding round.
Trust Ventures and Gigafund co-led the round, bringing the Austin, Texas-based startup’s total to $107 million since its inception in 2017. Existing backers include American Family Ventures, Mark vc, Breyer Capital, JAM Fund and Liquid 2. The company declined to reveal its valuation, saying only that it had “about doubled” since its $20 million Series A extension last October.
“Our plans cover everything traditional health insurers do while including free visits to next-generation virtual care services in primary care, mental health, pediatrics and maternity,” said the co-founder and CEO. Will Young.
Sana offers its plans in eight states, including Arizona, Oklahoma, Texas, Illinois, Ohio, and Kentucky. Having recently expanded to Virginia and Indiana, he plans to use some of his new capital to expand into new states in the coming months.
According to Young, his target customers are not just small businesses that already offer health insurance plans, but also those that couldn’t afford to provide health care for their employees. He estimates that 35-40% of his new customers are such companies.
Most clients receive 0% increase renewals, which Young says is rare in the industry, and has a low co-pay.
Sana has around 20,000 people on its health plans today and has tripled the number of clients in the past year, he said. They 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.
The company’s model is unique, he says, because of its vertically integrated approach. It makes money by charging fees for a variety of services related to selling, underwriting, and administering health plans. It also receives income on insurance risk.
In January, Sana opened its first primary care physical health center, dubbed Sana MD, for its members in Austin. Concierge services at the center are available free of charge to its members on most plans, according to Young.
Notably, Trust Ventures and Gigafund have invested in Sana since the company’s funding round in 2019. The latter has led four separate investment rounds in the company as “the team continues to impress…with its phenomenal vision and execution,” said Stephen Oskoui, Managing Partner of Gigafund, in a written statement.
Salen Churifounder and general partner of Trust Ventures, believes Sana’s strengths lie in its ability to leverage an “extensive network of providers” and “provide access to cutting-edge digital health and wellness technologies.” -be – all at a lower cost to small businesses than legacy health insurance.”
In addition to expanding into new markets, Sana plans to use its new capital to hire in its operations, member advocacy, sales and marketing teams. It also plans to open more primary care health centers in other locations, according to Young.
Currently, Sana, the first remote, has 170 employees, up from 80 at the start of 2021.
The insurtech industry has had its ups and downs lately. Publicly listed companies in the space are still struggling as more startups lay off and still others raise new capital at unicorn valuations.