Venture Capital: Health Insurer Oscar Raises $225M Amidst COVID-19
Investors in the new round included Alphabet and Khosla Ventures.
Direct-to-consumer health insurance provider Oscar announced Friday its raise of $225 million, bringing its total funding to $1.5 billion. Mario Schlosser and Joshua Kushner co-founded the company in 2012. New York-based Oscar focusses on simplifying health care and insurance through the use of technology. (MedCityNews)
Oscar: New funding round
New investors Baillie Gifford and Coatue joined the Series C round. These investors typically invest in startups where there is an imminent possibility of an IPO. Existing investors who participated included Alphabet (NASDAQ: GOOGL), General Catalyst, Khosla Ventures, Lakestar, and Thrive Capital, among others.
Two years ago, the company raised $540 million via a corporate round led by Alphabet and a venture round led by Founders Fund.
The funds raised last week will progress Oscar’s tech-enabled initiatives to simplify healthcare.
“Transforming the health insurance experience requires the creation of personalized, affordable experiences at scale,” said founder Mario Schlosser. “At Oscar, we combine our full-stack technology platform and data-driven approach to deliver seamless care that meets members where they are. We have created an experience that feels like you have a doctor in the family. This funding enables us to further accelerate the development of our unique model while creating efficiencies and cost-savings.”
However, in April, Oscar cut 5% of its staff to reduce its costs.
Oscar intends to clock revenues of $2 billion by end-2020 and the new funds will be instrumental in progress towards this milestone.
Currently, Oscar has 420,000 members in insurance plans for individuals and families, businesses, and Medicare Advantage plans.
It also recently joined forces with Cigna (NYSE: CI) to launch co-branded plans aimed at small businesses. With this tie-up, Oscar will expand into Atlanta, San Francisco, and several cities in Tennessee later this year.
Digital tools are an important component of the company’s business model. About 63% of Its members’ interactions with the healthcare system are virtual.
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