Collective Health Secures $81 Million in New Funding to Expand Employer Healthcare Platform Nationwide

Collective Health, a software company dedicated to helping small business owners transition to self-funded plans, raised $81 million today, bringing its total funding to $119 million.

Google Ventures was the sole new investor in this funding round. Existing investors, including NEA, Founders Fund, Maverick Capital, Redpoint Ventures, and RRE Ventures, also participated in the round. To date, Collective Health has operated exclusively in California; however, the newly raised capital will support its nationwide expansion starting next year.

Collective Health also announced that it would partner with Anthem Blue Shield in California to deliver its products. In 2016, Collective Health is expected to serve 30,000 members and process over $200 million in health insurance claims, with this figure projected to rise to $2 billion in 2017.

“We are working to shift the focus of health insurance from ‘profit’ to ‘people,’” said Ali Diab, CEO of Collective Health, in a statement. “The substantial capital raised in this funding round comes at just the right time, empowering us to deliver solutions to companies across the United States. This funding will also enable us to continue investing in building our world-class team, strengthening new relationships with key partners, and significantly expanding our customer base. Ultimately, this capital will help Collective Health better fulfill its mission, driving substantial improvements in the healthcare experience for our nation.”

Collective Health’s previous funding round took place this March, raising $38 million. A company spokesperson explained to foreign media that while most large enterprises with 5,000 or more employees opt for self-funded health plans, the transition to such arrangements is prohibitively expensive for smaller businesses. Barriers to this transition include hiring human resources support and paying consulting fees; however, by leveraging Collective Health’s services, small companies can avoid these challenges entirely.

Collective Health also licenses access to its extensive network of healthcare providers, enabling members’ employees to easily obtain local medical services. When visiting a doctor, employees need only present their Collective Health insurance card to receive coverage, operating in a manner similar to large insurance companies. Collective Health charges employers a fixed monthly service fee per employee.

Recently, Collective Health signed a contract with Activision Blizzard (Activision, Inc.), making it one of its latest clients. Activision Blizzard is a globally renowned American video game company, known for producing games such as "Call of Duty" and "World of Warcraft."

Compiled by Chen Xin
Edited by: Mo Renying