The antiquated and fragmented health insurance system in the U.S. has created big openings for innovation. And Austin startup Sana Benefits is planning to become a bigger and more disruptive player in the space, fueled by a new $20.8 million investment.
Three Austin venture capital firms -- Gigafund, Trust Ventures and mark vc -- led the new Series A funding round. The startup, led by co-founder and CEO Will Young, has now raised about $27 million since its founding in 2017. Last October, it raised a $6.3 million round led by Gigafund and Trust Ventures.
The startup, along with other new competitors in the market, is filling a need felt by many small businesses that want to save money on employee health care plans by self-funding their programs and customizing offerings based on their needs. It's an alternative to the pre-packaged plans offered by many of the largest health insurance companies in the country. The company's plans include health, vision, dental, fitness classes, maternity care and telemedicine, and it doesn't have the out-of-network fees most larger insurers charge.
"We can serve almost any small business with five employees or more," Young told Inno via e-mail. "Our customers range from tech startups like Door.com and Abodewell, to a service-oriented business like Jack Boles Parking, to Village Tech, which is a charter school. We have customers in trucking, oil and gas, restaurants, tech, and just about everything in between."
The company boosted its staff from 11 to 50 in 2019. It now has about 75 employees -- about half of whom are in Austin and the others work remotely in other areas. Sana Benefits currently has 11 job openings posted on its site, including Austin-based and remote positions in sales, marketing, product, engineering and operations.
"... our rate of hiring is pretty intense and will continue now that we’ve raised a significant funding round," Young said.
Sana Benefits, which currently serves residents in Texas and Kentucky, has partnered with fellow health care startups to bolster its offerings. That includes using PlushCare for telemedicine and Ginger.io for mental health.
The startup says it has seen membership growth boom 10x in the past year, and it plans to expand into new markets by the start of 2021.
Meanwhile, the pandemic has been a mixed bag for the health care industry across the board, and Sana Benefits experienced some of those ups and downs.
"In Q2, utilization of in-person health care was down nationwide because of Covid," Young said. "That was true for Sana’s members, too. But we saw utilization of our virtual offerings grow month-over-month. That was especially true for virtual mental health solutions like Ginger and Vida."
