Collective Health secures $205 million led by SoftBank to provide smarter alternative to traditional health insurance

Collective Health, a healthtech startup that gives companies a smarter alternative to traditional health insurance, has raised $205 million round of new funding led by the SoftBank Vision Fund to advance expansion in the $1.2 trillion employer health insurance industry.

Collective Health will use the new funding to accelerate adoption of its enterprise healthcare platform with employers across the U.S. and deepen strategic partnerships across the industry and deliver even greater technology capabilities to address fundamental health insurance service issues that plague U.S. consumers and employers alike.

Founded in 2013 by Ali Diab and Rajaie Batniji, Collective Health, through its cloud-based, integrated health benefits platform, enables self-insured employers to get more out of their healthcare investment while taking better care of their people. The startup has seen exponential traction in the $1.2 trillion employer-sponsored insurance market — its membership has grown by 500x in just three sales cycles. Currently, the company covers 70,000 employee and dependent lives across 15 employers; clients include Activision Blizzard, Crossfit, eBay, Palantir and Red Bull.

“We’re appreciative of our investors, both new and returning, in their commitment to supporting our mission to fix the deepest rooted problems in healthcare today,” said Ali Diab, Co-founder and CEO of Collective Health. “We’re excited to have the SoftBank Vision Fund lead the round given their proven track record of supporting category-defining companies, and they share our vision for a better healthcare experience. Whether working with more networks or helping facilitate direct relationships between employers and provider systems, we will continue to set the standard for the industry with a focus on the customer, providing the healthcare experience we all deserve.”

Building upon the increasing demand from American employers looking to address the ballooning complexity and cost of healthcare, Collective Health is accelerating growth across all 50 states by strengthening its national sales, engineering, and customer experience teams in San Francisco, Chicago, and Lehi.

“With U.S. healthcare costs at $3.65 trillion in 2018, Collective Health is reinventing the healthcare experience for companies and their employees. Their innovative business model and technology platform are not only helping employers understand and optimize their healthcare spend, they are also providing employees with a better healthcare experience,” said Deep Nishar, Senior Managing Partner at SoftBank Investment Advisers. “The company has continued to scale its business across U.S. employers, and we are excited to help them drive further innovation and adoption in the approximately $1.2 trillion employer health insurance industry.”

Collective Health makes health insurance work for everyone. With more than 200,000 lives across over 45 enterprise clients in diverse industries such as technology, agriculture, entertainment, and retail, among others, Collective Health’s growth has gone from early adopter to mainstream since launching in 2013.

“Meaningful improvements in healthcare aren’t going to come from incumbents or consortiums,” said Mohamad Makhzoumi, General Partner and Head of Healthcare Services and Healthcare IT investing at NEA. “The healthcare industry needs a new foundation to run effectively and fill the gaping holes where proper technology doesn’t currently exist. We continue to double down on our partnership with Collective Health because it’s the only company that has built a software platform capable of reimagining the industry by focusing on the customer experience.”