Thatch raises $108 million at $1 billion valuation

Thatch, a San Francisco-based health benefits platform, has raised $108 million in new funding, bringing its valuation to $1 billion. The financing round included participation from The General Partnership, Index Ventures, General Catalyst, and Andreessen Horowitz, with additional involvement from ADP Ventures, Paychex, Eli Lilly and Company, and others.

The company utilizes an Individual Coverage Health Reimbursement Arrangement (ICHRA) model, which allows employers to set defined healthcare budgets rather than selecting a single group health plan for their entire workforce. This approach enables employees to use tax-free funds to select individual insurance coverage tailored to their specific needs, such as particular doctors, prescriptions, or family coverage requirements. Thatch also uses artificial intelligence to assist employees in selecting appropriate health, dental, and vision plans.

Thatch reports significant growth, with revenue increasing nearly sevenfold over the past year and its platform now serving more than 5,000 employers. The model aims to provide employers with greater predictability regarding healthcare spending while addressing the limitations of traditional group plans that may not meet the diverse needs of individual employees.