Oscar Health has raised a new round of fresh capital to further its growth plans of four to five cities every year, in individual, small group, and other market segments, according to a blog post by the health insurance startup.
The company has enrolled nearly 250,000 members across six states so far in 2018, according to the blog entry. Oscar also projected sales of more than $1 billion in gross premium revenue.
The company raised $165 million in a round led by Brian Singerman and Founders Fund. Also taking part in the round were 8VC, Verily Life Sciences, Fidelity, General Catalyst, Capital G, Khosla Ventures, and Thrive Capital, among others. Prior to the fundraise, Oscar had raised more than $800 million.
A source familiar with the company estimated Oscar Health’s valuation at $3.2 billion, compared with $2.7 billion two years ago. Axios speculated that even with heavy losses, Oscar could be attractive in an acquisition bid, given the heady volume of healthcare M&A deals we are currently seeing.
But the company’s website maintains its business model is working.
“In 2017, we finished the year on track to have a positive underwriting margin for the first time and significantly reduced our medical loss ratio. And we nearly tripled our projected membership and premium revenue going into 2018.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Our investors’ deep collective experience in healthcare and technology will be vital to our success in the coming years,” the post said.
Thanks to collaborations with the Cleveland Clinic and Humana, Oscar has been able to expand into Ohio and Tennessee, respectively. The Cleveland Clinic | Oscar individual health plans are available on and off the exchanges in Ohio. Coverage began in January.
Thorsten Wirkes, vice president of Oscar Health, who will be speaking at the upcoming MedCity INVEST conference in Chicago in May, said in a recent interview that the larger goal of Oscar’s collaboration with the Cleveland Clinic is to develop a deep payer-provider integration and figure out how the company can break down barriers between payer and provider.
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