Health Insurance Marketplace Startup Lands $10.5M
Gravie—a Minneapolis-based startup that helps individuals and businesses comparison-shop for health care in the private market and on MNsure, the new state-run insurance exchange—said Monday that it has raised $10.5 million in a recent funding round.
The round was led by Aberdare Ventures, a San Francisco-based investment firm that focuses on the health care industry. New York-based venture capital firm FirstMark Capital, an existing Gravie investor, also contributed to the latest round, which brings Gravie’s total fundraising to $13 million.
Gravie said the funding will allow it to “scale up its operations and expand its services to all 50 states by 2015.”
Gravie was co-founded by Abir Sen, who serves as the firm's CEO and is a serial entrepreneur behind such other companies as Bloom Health and RedBrick. Sen was recently profiled in a Twin Cities Business feature story about six young Minnesota millionaires. Learn more about Sen and Gravie here.
On the heels of the investment, Aberdare Ventures partner Mohit Kaushal is joining Gravie’s board of directors. Kaushal most recently served as chief strategy officer and executive vice president of business development at the West Health investment fund. Kaushal also served as a member of the “White House Health IT task force,” a team of health care policymakers in the Obama administration, according to Gravie.
Kaushal’s “extensive health care knowledge and work at the White House will help us as we work to transform how people access healthcare in the U.S.,” Sen said in a statement. “Our partnership with FirstMark has been crucial to our early success, and now we are excited to add Aberdare to the team.”
Gravie's business model is based in part on the belief that, under the changes brought about by the Affordable Care Act, group insurance plans may no longer be most effective for certain employers or consumers. It works with individual consumers, as well as employers and their workers, to help them shop for the best deal on individual insurance plans.
In addition to helping people buy insurance, Gravie provides members what it calls “concierge-level after-sale services”—such as health plan troubleshooting, ongoing consultation, analysis of spending across health care accounts, and assistance in paying bills.
Gravie was founded last August. “I'm very impressed by the amount of progress Gravie has made in such a short time,” Kaushal said in a statement. “The Affordable Care Act has brought in a new era in which the group insurance plan may no longer make the most sense. Individuals who buy insurance on their own are no longer at a disadvantage compared to employer-sponsored coverage, and the individual market may be the right answer for many employers looking to provide coverage to their employees.”
In 2013, Twin Cities Business hosted a multi-part webinar and e-newsletter series about health care reform. One story that was part of that series focused on small businesses' strategies for dealing with the new health care landscape, and one business owner cited Gravie as a useful tool for helping employees receive coverage while also cutting costs.
Other Recent Fundraising
Gravie isn't the only local startup to recently raise funds.
Argos Risk, LLC—a Minneapolis-based maker of Web-based solutions designed to help companies manage credit risk and protect against business identity fraud—disclosed in a recent regulatory filing that it is seeking to raise $1.3 million in a fundraising round, and it has thus far closed on $700,000.
Earlier this month, news surfaced that Minneapolis-based sports software firm Sport Ngin closed on a $15 million round of funding, with plans to bring in $11 million more.
And in late February, NxThera, Inc., a Maple Grove-based medical device manufacturer, said that it exceeded its $20 million fundraising goal in a recent financing round.
Those are just a few recent examples. For more, read Twin Cities Business' roundup of other firms that have closed on millions in financing in recent months.