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Thatch raises $40M to give employees more control of their health care choices
Thatch, a startup focusing on health insurance transformation, raised $40M in Series B funding led by Index Ventures. With a total of $84.5M since its inception in 2021, it offers Individual Coverage Health Reimbursement Arrangements (ICHRA) that allow employees greater choice in health care spending. The company has seen significant growth, with revenue increasing 8x year-over-year and over a thousand companies onboarded.
Key points
- Thatch raised $40M in Series B funding, totaling $84.5M since 2021.
- It specializes in Individual Coverage Health Reimbursement Arrangements (ICHRA) which allows customization of health benefits for employees.
- Each employee receives a budget (e.g., $1,000/month) to choose health plans, enhancing flexibility compared to traditional plans.
- Revenue grew 8x year-over-year as Thatch onboarded over a thousand companies.
- Founders emphasize innovation in healthcare benefits as ICHRA is a new regulatory option since 2020.
- Partnerships with QuickBooks and developing offerings within ADP aim to simplify ICHRA account setups for companies.
Why it matters
- ICHRA was introduced in 2020, representing a significant change in how employees can use health reimbursement accounts.
- The growth of health tech startups reflects an increasing trend towards personalized and flexible healthcare solutions.
- As of 2025, the rise of fintech in healthcare, including payment and budgeting solutions, aligns with ongoing improvements in healthcare accessibility and efficiency.
Thatch's successful funding round and innovative approach to employee health care spending illustrates a shift toward personalized, flexible benefits in the healthcare landscape, reflecting broader trends in fintech and health tech that prioritize employee choice.