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.