When you’re dealing with health issues, worrying about how you’re going to pay for care can be a major additional stressor. This can be compounded when you’re facing major illnesses, such as receiving treatment for cancer or having surgery.
Chris Ellis and Adam Stevenson had the unfortunate experiences of losing parents to cancer at a young age. During those emotionally painful times, they also saw firsthand how difficult it was to manage the process of paying for care. So they teamed up in 2021 to build Thatch, a startup that aims to simplify health payments for employers and employees alike.
“We both felt really strongly that we wanted to take the things that we’ve learned and go make an impact on patients like our parents,” Ellis recalls. “When we left our jobs in October 2021, we actually weren’t sure yet even what kind of shape that would take. But when we went out and we talked to a bunch of patients, the thing that we kept hearing over and over again, was not necessarily related to the care itself, but actually, that paying for health care sucks.”
Ellis had started his career as a cancer researcher at MIT. He then founded the U.S. sales team at Sophia Genetics, a clinical software startup, before working on the software product team at Agilent, a large biotech company. Stevenson spent four years at health insurance giant Humana, while launching a few bootstrapped SaaS companies on the side. He eventually landed at Stripe, where he started and led different customer engineering teams for seven years.
The pair set out to build Thatch in an effort to make it easier for people to manage healthcare costs. The startup is starting out by targeting other startups, which often lack the budgets to offer health benefits that can rival that of larger companies. The premise is that if startups can offer more sophisticated and easy-to-understand health benefits, then they will be able to greater compete for talent in the tech world. It’s something that Ellis realized was sorely needed when trying to buy healthcare for the Thatch team.
“Healthcare is the second biggest cost after salaries. So we spent a ton of money on it, and it’s something that’s extremely time-consuming,” he told TechCrunch. “But despite the fact that we spent all this time, and all this money, the experience for our team still wasn’t great.”
Today, Thatch is coming out of stealth armed with over $6 million that was raised in pre-seed and seed funding. Andreessen Horowitz (a16z) and GV (Google Ventures) co-led the company’s $5.6 million seed round, which included participation from Lux Capital, Quiet Capital, Not Boring Capital and BrightEdge (the impact investment arm of the American Cancer Society).
Put simply, Thatch says it is “on a mission to help businesses give great healthcare to their employees in under five minutes.” Thatch sits on top of a company’s existing health plan and is designed to make it less stressful for employees to manage their healthcare finances. Its offering includes a tech-enabled Health Savings Account (HSA), a debit card for all healthcare expenses as well as on-demand access to “experts” who can help resolve billing issues via text.
Let’s be honest. Most of us get frustrated and confused when it comes to understanding HSAs. Thatch says it can help users figure out things like which expenses are HSA-eligible and also give them a dashboard to save receipts. It also helps them understand in real time any tax savings from using their HSA.
“Employees simply upload a bill, share some basic information, and a patient advocate will take care of it behind the scenes,” said Ellis, who serves as Thatch’s CEO. “We’re starting with the first piece of the puzzle — giving people a way to pay out of pocket expenses and to understand their medical bills.”
Thatch, which today has eight employees, is also working on building out a marketplace for startups and insurers.
“The platform that we’re working toward is one where instead of having a founder talk to a broker and deal individually with different digital health vendors, they can just come to Thatch, put in a budget and actually select their own insurance policy from the platform,” Ellis said.
Krishna Yeshwant, general partner at GV, told TechCrunch that it was drawn to several things about Thatch when deciding to invest.
“We look to partner with founders who are kind, thoughtful, and humble, and Chris and Adam lead the team with those qualities. The founding team’s breadth of experience — from Humana, Stripe, and Agilent — is highly complementary to the problem they are solving,” he wrote. “The GV team is excited to work with Thatch as they advance their mission, making healthcare easier and more accessible for patients with a technology-forward approach.”
Want more fintech news in your inbox? Sign up here.
Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a note at tips@techcrunch.com. Happy to respect anonymity requests.
Source @TechCrunch
