Minneapolis-based health insurance startup Bright Health has completed a fundraising round that has surpassed more than all of its previous fundraises combined.
On Tuesday, the company announced that it has raised $635 million in an oversubscribed Series D funding campaign. Its prior total was $440 million from three fundraises, which means the company has now surpassed the $1 billion mark. It also marks the highest fundraise of any Minnesota company this year, far surpassing Total Expert’s $52 million fundraise in October. What's more, Bright Health's fundraise is the largest in the state since 2009, according to med-tech trade group Medical Alley Association.
Bright Health said the new capital will be used to hire more people for its expanding geographical presence. (The company has announced plans to enter 13 new markets across seven states in 2020 alone).
“Real transformation will require disruption at every stage of the healthcare system and Bright Health designed its model with this in mind,” Mike Mikan, president and vice chairman of Bright Health, said in a news release.
Bright Health’s business model is to partner with a single comprehensive health care provider in each market it enters. This creates “narrow networks” with lower premiums and better care, according to the company.
“This funding will bring us one step closer to creating a value-based healthcare system that streamlines the healthcare experience for the consumer.”
The Series D round was led by Maryland-based venture capital firm New Enterprise Associations (NEA). It also included investments from Andy Slavitt’s Town Hall Ventures, as well as Bessemer Venture Partners, Cross Creek Advisors, Declaration Partners, Flare Capital Partners, Greenspring Associates, Meritech Capital, and Redpoint Ventures.
Several investors, including NEA and Town Hall, are repeat investors.
“The Series D funding marks not only a major investment in our company’s future but is an affirmation from our existing investors that we have tapped into an unmet consumer demand for a better healthcare experience,” said Bright Health CEO Bob Sheehy.
Bright Health is currently in 22 markets across 12 states. In 2017, the company posted revenue of $45 million, landed on Forbes’ Next Billion-Dollar Startups list, and raised $160 million in a Series B funding round.
The company's recent fundraise will likely send a positive signal about Minnesota's startup scene, too.
"It often takes successes like Bright’s to draw attention to the community and reset people’s paradigms," the Medical Alley Association said in an email. "We’re ... excited for their future here [and] hopeful that their prominence will help change the conversation around the early stage community here in Minnesota."