Gravie Closes $14M Funding Round
Minneapolis-based health benefit services startup Gravie Inc. announced Wednesday the closure of its Series C funding round, in which it secured $14.1 million from at least 17 investors.
It was the largest funding round to date for the four-year-old startup. Total investment in the company now tops $44 million.
Abir Sen, the co-founder and CEO of Gravie, told TCB that the investor pool was largely from Minnesota. “There were individuals that participated—some management, some people that had already invested,” he said, “but the institutional [venture capital firms] put in the bulk of the money.”
Among the existing firms that led the round was Eden Prairie-based Split Rock Partners. New York City-based First Mark Capital and San Francisco-based Aberdare Ventures also took part. Yet, GE Ventures, the venture capital arm of General Electric, ultimately led the round.
Gravie, which helps individuals and businesses comparison shop for health care plans, currently serves more than 900 employers and over 62,000 individuals in 34 states.
Sen said the new capital would go toward marketing and product development efforts, specifically in seven states: Illinois, Indiana, Florida, Texas, Ohio, Pennsylvania and California.
The reason, according to Sen, is a mix of market opportunity and other factors. “For us, what can happen is you have a company that is based in Texas, but they may have a salesperson that lives in Delaware,” he said. “So you end up having a customer in Delaware as well… Our goal, as we go out to the market, is to make something that is very complicated—like health care—as simple as possible for ordinary people, regardless of where they live, how much they earn or how old they are.”
Last February, Gravie expanded into the Medicare market through the acquisition of Breitenfeldt Group, one of the largest Medicare brokerages in Minnesota.
“The reason we acquired Medicare capabilities is because most people in the country are getting older,” Sen said. “We don’t want to have an expiry date where, if you’re 65, we can’t help you anymore. So it made sense to acquire existing capabilities rather than build it ourselves.”
Headcount at Gravie is currently 105, Sen said. With the new capital and Gravie’s plan now underway, he expects the startup will hire up to 20 more workers by the end of the year.