Thatch has raised a $108 million Series C at a $1 billion valuation for a benefits platform that lets employers replace a single group health plan with defined budgets for individual coverage. Human-resources teams set the contribution; employees use it to choose their own insurance and, when the plan allows, pay eligible medical costs with what remains. The San Francisco company says more than 5,000 employers now use the product.
The workflow begins in an employer dashboard, where a company connects its bank and payroll, determines employee eligibility and sets monthly allowances. Workers can compare individual plans based on their doctors, hospitals, prescriptions and budget. Thatch then submits enrollments, makes payments and produces compliance reporting. After insurance premiums are paid, remaining allowance can move onto a Thatch card for qualified expenses such as copays, prescriptions and therapy when the employer’s plan design permits them.
This is an administration and payments business, not an insurer or care provider. Thatch’s employer agreement says it charges companies monthly administration fees, can receive commissions from insurance carriers when it serves as broker of record and earns card-network interchange when members use the Thatch card. The employer-funded healthcare contribution is separate from those fees, distinguishing the money available for employee benefits from Thatch’s own compensation.
The product has to connect employers, workers, payroll systems and insurance carriers while handling the financial and record-keeping work between them. Thatch identifies ADP, Paychex, Gusto and QuickBooks as distribution partners rather than customers. The company said revenue grew nearly sevenfold over the past year, alongside adoption by more than 5,000 employers, but it did not disclose revenue in dollars.
The General Partnership, Index Ventures, General Catalyst and Andreessen Horowitz provided the financing. Scale Venture Partners, ADP Ventures, Paychex, Eli Lilly and several other investors participated. Scale described the transaction as Thatch’s Series C, while the company’s announcement placed its valuation at $1 billion.
Payroll and benefits partnerships can put Thatch in front of more employers, but each new account adds plan selection, enrollment, premium payments, reporting and member support. The operating test after this round is whether Thatch can keep those processes reliable as it expands beyond 5,000 employers, because the product’s value depends as much on accurate administration as it does on giving workers more choice.