Gravie Raises $12.5 Million Series B For Insurance Shopping Platform

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Minneapolis-based digital health startup Gravie announces that it has raised a $12.5 million Series B funding round led by Split Rock Partners, supplemented with additional contributions from returning investors FirstMark Capital and Aberdale Ventures. The new round follows Gravie’s $10 million Series A by exactly a year, and brings the company’s total raised to $26 million since its 2013 launch.

Gravie is a startup focused on providing consumers with a platform that they can use to compare and enroll in health insurance plans. The company is building a platform that goes beyond insurance shopping and is trying to deliver a concierge-like intermediary between consumers and insurance companies. Like Healthcare.gov, Gravie’s platform reviews a users’ income and employer health insurance premium contributions, and then determines whether they are eligible for federally subsidized insurance plans. Because subsidies are only available to consumers that apply for insurance through a state or federal exchange, the next step in Gravie’s user experience is a bit inconvenient. A Gravie representative will call and walk users through the application process for the subsidy, not within Gravie’s own platform, but on the state or federal exchanges – the same sites that Gravie is competing with for business.

Once a user is signed up for insurance, Gravie attempts to continue the relationship, offering financial counseling to users so they understand how much various procedures and medications will cost out of pocket. The company also offers services to help users understand their medical bills and why claims are denied. Gravie is also working to differentiate itself from other exchanges by building out a physical presence. The company partnered with Target to pilot an in-store insurance shopping kiosk where Gravie employees will answer questions and help shoppers sign up for insurance in person. The pilot included three Minneapolis Target locations and will run year-round so that consumers who buy plans during the annual enrollment period will have a place they can return to to ask questions.

While the federal health insurance exchange, Healthcare.gov, and its state-level equivalents own the lion’s share of user activity in this market, startups have seen the chronic troubled rollouts as a sign that the government programs are vulnerable to private competition. Stride Health, another private startup attempting to disrupt the new market, announced earlier this year that it has raised a $2.4 million seed round that it will use to launch its own insurance comparison platform. For its part, Gravie has recruited Mohit Kaushal, MD as a key member of its Board of Directors. Kaushal worked on the Obama administration’s health IT task force and was a part of the administration’s healthcare policy team. He also served as the director of Connected Health at the FCC, and as the EVP of business development at West Health. With his guidance and insider knowledge of the health insurance exchange market, Gravie is hoping to one-up Healthcare.gov and build a financially sustainable private alternative for consumers.

Gravie is currently licensed to sell insurance in all 50 states, but at this point only operates in Minnesota, Indiana, and Florida. The company will use the new funds to bolster its employee base and expand into Texas and Illinois.


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