Collective Health, a software company that helps small employers transition to self-funded plans, has raised another $81 million, bringing its total funding to $119 million.
Google Ventures was the sole new investor in the round. Returning investors NEA, Founders Fund, Maverick Capital, Redpoint Ventures and RRE Ventures also contributed. Up until now Collective Health has been operating only in California, but the new funding will allow it to expand operations nationwide starting next year.
The company also announced that it would work with Anthem and Blue Shield of California to deliver its offering. The company anticipates serving 30,000 members and processing over $200 million in health insurance claims in 2016, and hope to have that number up to $2 billion in 2017.
“We’re working to shift the focus of health insurance from profits to people,” Ali Diab, CEO of Collective Health, said in a statement. “This significant infusion of capital comes at the perfect moment, enabling us to make our solution available to companies across the U.S. The funding will also enable us to continue to invest in building out our world-class team, forge new relationships with key partners and significantly grow our customer base. Ultimately, this funding will give Collective Health a big boost in our mission to make the healthcare experience in our country something we can all feel proud of.”
When Collective Health raised it's last $38 million round in March, a company spokesperson explained to MobiHealthNews that self funding is something a majority of companies that have 5,000 or more employees do, but the process of transitioning into a self-funded arrangement is costly for smaller companies to consider.
Some barriers to transitioning include hiring HR support and paying consulting fees, neither of which are necessary with Collective Health. Collective Health also rents access to large provider networks so employees won’t have difficulty finding care in their area. When employees visit the doctor, similar to how a large payor works, they can show their Collective Health insurance card and receive coverage for health services. The company charges employers a flat fee per employee per month for the service.
Collective Health recently signed Activision Blizzard, the video game company behind titles like Call of Duty and World of Warcraft, as one of its newest customers.