Oscar Health Raises $33 Million Venture Round On $1.75 Billion Valuation


Oscar Health has raised an additional $32.5 million in fresh capital from sole investor Google ventures. Google is a new investor for Oscar but joins a laundry list of high-profile investors with money in the technology-savvy insurance startup. In the two years since its launch, Oscar has raised $328 million from VC firms including Founders Fund, Khosla Ventures, Thrive Capital, and noted angel investor Peter Thiel. Oscar’s newest round follows a $145 million funding round in April of this year, and brings the company’s total valuation at $1.75 billion.

Oscar Health is working to break into the insurance markets by bringing technology and cost control to consumers to build a more economically viable healthcare market. Oscar offers free fitness tracking devices to all of its customers, along with free and unlimited access to on-demand telehealth visits. It also offers free primary care office visits and free generic prescription drugs. It has also hired 45 engineers to begin building additional tools to help its consumers chose high quality, low cost providers in their area.

Rather than targeting employers, Oscar has focused its early efforts on signing individual subscribers up through its presence on ACA-mandated online insurance exchanges. In its initial year, the company offer plans in New York and only signed 14,000 people, or just under two percent of all New York enrollees. Since then, the company has expanded to Texas and has grown its customer base to 40,000.

With heavy investments in technology development and lower than anticipated enrollment numbers, Oscar has been running at a loss since its launch. The core business of delivering healthcare services is operating at a profit, according to CEO Mario Schlosser, but combined with other expenses the startup booked a net loss of $27.5 million on a total revenue of $56.9 million in 2014.

David Lawee, the head of Google Capital, explains that the company’s interest in Oscar is the way that it is positioning itself to leverage technology to bring down costs. With a number of technologies currently under development, including glucose monitoring contact lenses and cancer searching nanoparticles, Google will eventually need to compel insurance companies to cover its new products, and Oscar is a good candidate to do just that.

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