Centivo is building a new type of digital health plan aimed at self-funded employers looking to provide employees with quality care they can afford.
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“Most people have less than $500 in their bank account, yet the average health plan deductible rate is $2,000,” Ashok Subramanian, co-founder and CEO of Centivo, told Crunchbase News. “We are partnering with leading providers in the market to come up with a solution that enables users of the health plan to know how much the costs will be.”
Subramanian has worked in the self-funded health plan space for 20 years, including nine years as co-founder and CEO of Liazon, a private benefits exchange for active employees that was acquired by Towers Watson in 2013. He co-founded Centivo in 2017.
The New York-based company focuses on self-funded employers with more than 100 employees, a market that includes approximately 110 million people and is valued at $50 billion to $75 billion, Subramanian said.
Centivo provides a primary care-centered model, partnering with local health care providers and using data analytics to refine the network and navigate members to the right providers. The company has been able to prove that it can save 15 percent or more compared to traditional insurance carriers, and is poised to take its business to the next level.
The company secured a $34 million Series B funding round led by B Capital Group. The latest funding brings Centivo’s total funding to $68 million, which includes a $34 million Series A round in 2018, according to Crunchbase data.
New investors, including Define Ventures, HarbourVest and Nassau Street Ventures, join with existing investors Bain Capital Ventures, Company Ventures, F-Prime Capital Partners, Ingleside Investors, Maverick Ventures and Rand Capital, as well as various individuals.
At the time of the Series A, Centivo had zero clients and zero members. It launched with its first client in January 2019 and is now in six markets, has a number of key partnerships, and has committed 25 self-funded employers on the plan serving 50,000 members, Subramanian said.
With the Series B funding, the company expects to diversify its customer base, invest in product development and engineering, and is poised for triple growth in the next 18 months as well as expand into six new markets by 2022.
“Employers at the self-funded level are thirsty for new and better tools,” Subramanian said. “There is not a lot of time left in the year, and Jan. 1 is when 60 percent of companies make their enrollment decisions. While we are implementing those health plans, we are also planning ahead for 2022, as a larger number of employers make decisions on which health care plans to go with by June 1.”
What investors have to say
Meanwhile, Karen Page, general partner at B Capital Group, is joining Centivo’s board. What attracted her to the company was the impact Centivo was having on the health care insurance industry.
“We know health care needs to be transformed, but what isn’t as obvious is the underpinning of technology,” Page said in an interview. “We see the impact of changing people’s lives when they may not have been able to afford it. Centivo has the right formula to address the best market and form the right partnerships, and is going to have the greatest impact.”
Illustration: Dom Guzman
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