New York City-based health insurance startup Oscar raised $145 million in a round led by Peter Thiel and Brian Singerman from Founders Fund. Other contributors to the round include new investors Li Ka-shing of Horizons Ventures, the Wellington Management Company and Goldman Sachs, in addition to all existing investors, a group that includes Box Group, Thrive Capital, Khosla Ventures, General Catalyst Partners, and Red Swan Ventures.
This is Oscar's fourth round of funding, and it brings the company's total funding to $320 million. Oscar is also growing fast: when MobiHealthNews first wrote about Oscar in November it had 16,000 members. Less than six months later, it's now reporting 40,000.
"We don’t get excited about raising money, but rather, see it as a small step towards improving experiences for our members each and every day," CEO Mario Schlosser wrote in a short post on the company's blog. "Our most recent round of financing will ensure our continued dedication to service and innovation for our members. It will allow us to grow our staff, create new products and extend our plans to new members across the country."
As a small newcomer in an industry dominated by large, longstanding players, Oscar has attempted to differentiate itself with a positive user experience, proactive customer engagement, and an inclination to move beyond the traditional role of the health insurer -- which often means incorporating digital health technology. Early on, Oscar partnered with Teladoc to bring telehealth services to members.
"We add some novel elements where we try to move away from someone who is just a claims processor or the pipes, but be more like a go-to and a doctor in the family," co-founder Kevin Nazemi said at an event in Boston last fall. "That manifests itself in the ability for all our members to push a button and have a doctor call them back in seven minutes."
In December, the company also delved into wearables, teaming up with Misfit Wearables to get more of its members moving. As part of the deal, each Oscar member gets a free Misfit Flash tracker and the opportunity to earn up to $20 a month in Amazon.com credit by meeting step goals. The partnership means Misfit gets exposure for its newest wearable on a few thousand New York wrists, while Oscar hopefully lowers the healthcare costs of its members and continue to differentiate itself as an innovative player in the insurance market.