Clover Health Raises $35 Million Round, Bringing Total To $135 Million In Just Four Months


San Francisco-based insurance startup Clover Health has raised a $35 million Series B funding round just four months after it closed a separate $100 million round, bringing its its total raised to $135 million since its August 2014 launch. The company bootstrapped through its first year of operation, raising its first outside capital in September in the form of a $100 million investment led by First Round Capital. Its more recent round was led by Sequoia Capital, with additional participation from returning investors First Round and Athyrium Capital Management.

While $135 million is a significant haul for the young startup, the numbers are in line with other startups working in the health insurance industry. Oscar Health raised $150 million in its first year of operation, and has since raised an additional $177 million, bringing its total funding level to $327 million since its July 2013 formation. Both Clover Health and Oscar Health are building insurance companies around the idea that better data analytics and more aggressive population health outreach efforts will bend the cost curve. The major difference between Clover Health and Oscar Health is that Oscar targets young, tech-savvy consumers, while Clover Health is a Medicare Advantage insurance plan and as such is pushing headstrong into the elderly care market, where cost containment is much bigger issue.

Clover Health is, at its core, a technology company but this does not mean that it needs, or even expects, its elderly customers to embrace technology. Instead, the company mines its own claims data to create a risk profile of its population and then supplements the care being provided by traditional healthcare providers with care from its own team of local nurse practitioners. Rather than reimbursing health systems for improved post-acute care, Clover Health owns the responsibility of care as its customers transition from hospital to home. The company also monitors chronic conditions and medication adherence through claims data and supplements care with in-home nurse practitioner visits to address issues in these cases as well.

The idea is sound, but Clover Health’s concept remains largely untested. Its only real-world footprint spans just nine counties in New Jersey. However, in the first half of 2015, it generate some impressive savings. Clover’s consumers were admitted to the hospital 50 percent less than Medicare patients living in the same area, and Clover’s population also had 34 percent fewer readmissions. With $135 million in fresh capital, the company will work to roll this concept out across larger markets while maintaining its impressive cost containment accomplishments.

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