Inside Thatch’s $44M Plan to Finally Fix Healthcare Payments

Thatch, a San Francisco-based startup, has secured $38 million in a Series A funding round led by Index Ventures and General Catalyst, aiming to tackle one of the most challenging aspects of modern life—paying for healthcare. The fresh capital comes at a crucial time as the startup seeks tIndexo expand its platform, designed to streamline health benefits for businesses and employees, making healthcare payments easier to manage, especially during stressful times.

Co-founders Chris Ellis and Adam Stevenson know all too well the difficulties of managing healthcare costs. Both lost parents to cancer at a young age and, during those painful experiences, witnessed firsthand how challenging it was to navigate the financial side of care. Motivated by this personal connection, they set out in 2021 to create Thatch, a company that simplifies health payments for employers and employees alike.

Ellis shared that during their early research, the same sentiment kept coming up: “Paying for healthcare sucks.” He and Stevenson saw an opportunity to make an impact on patients, inspired by their parents’ experiences. “We wanted to take what we’ve learned and use it to help others,” Ellis said. After leaving their jobs in October 2021, they focused on building a platform that addresses this widespread issue.

Thatch’s approach is centered on making health benefits more transparent and affordable, a challenge for many small businesses. The platform simplifies the complex Individual Coverage Health Reimbursement Arrangement (ICHRA) law, allowing employers to make tax-free contributions toward health insurance plans. Employees can then choose their own insurance, offering greater control and flexibility over their healthcare choices.

“Healthcare is the second biggest cost after salaries,” Ellis said. “But despite spending all this time and money, the experience still wasn’t great for our team.” This insight motivated the duo to develop Thatch as a tool to help startups and smaller businesses offer better health benefits—a competitive edge when attracting talent in the tech industry.

The $38 million Series A funding is a significant milestone, bringing Thatch’s total capital raised to $44 million. It follows a $6 million pre-seed and seed round, which saw participation from Andreessen Horowitz (a16z), GV (Google Ventures), Lux Capital, and others. This latest round also attracted investment from SemperVirens, The General Partnership, a16z, and Avid Ventures.

“There’s finally momentum towards a health insurance market that serves real people’s needs,” said Ellis. “We’re seeing interest from employers, brokers, and employees who recognize the opportunity to get high-quality healthcare at a transparent cost. This funding allows us to scale and meet the demand.”

Jahanvi Sardana, partner at Index Ventures, emphasized the broader significance of Thatch’s work: “Healthcare is one of the last financial decisions still controlled by employers. Like the shift from pensions to 401(k)s empowered individuals, healthcare is due for the same revolution. Thatch is driving this shift, pooling risk across businesses to create collective buying power.”

Thatch’s mission is to make healthcare payments as simple and stress-free as possible, especially for those facing serious illnesses like cancer. With the backing of top-tier investors and a platform that is gaining traction, the startup is well-positioned to make a meaningful impact in the health benefits space—offering a solution that could change how millions of people navigate the financial side of healthcare.

As Thatch continues to grow, Ellis and Stevenson’s mission remains deeply personal—ensuring that no one has to endure the same financial burdens they faced while caring for their loved ones.Their personal experiences have shaped Thatch’s mission, and with $44 million in funding, the company is ready to reshape the health benefits landscape for the better.