Thatch, a health benefits platform, announced on Tuesday that it raised $108 million in funding, reaching a $1 billion valuation.
Thatch helps employers offer Individual Coverage Health Reimbursement Arrangements (ICHRAs) — which recently rebranded as CHOICE Arrangements — in which employers can provide their employees tax-free money so they can purchase their own individual health insurance plans. Employees can also use the funds for certain healthcare expenses, including GLP-1s and therapy. More than 5,000 employers use the company, including Jersey Mike’s and Smoothie King.
The Series C funding round was from The General Partnership, Index Ventures, General Catalyst and Andreessen Horowitz. ADP Ventures, Paychex, Eli Lilly and Company, Scale Venture Partners, QuantumLight, SemperVirens, Quiet Capital and Avid Ventures also participated. In total, Thatch has raised $192.5 million in equity funding.
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“Every massive consumer market eventually gets rebuilt around the individual – Amazon did it for retail, Expedia for travel, Robinhood for investing. Thatch is doing it for healthcare,” said Jahanvi Sardana, partner at Index Ventures, in a statement. “With AI, the end state is bigger than shopping: an agent that knows you, holds your wallet and can find, book and pay for the right care. The magic is that you stop navigating healthcare and start being taken care of.”
The funding round will help Thatch build out the infrastructure behind individual health coverage at scale, according to Chris Ellis, CEO of Thatch.
“Concretely, that’s three things: deepening our integrations with payroll and HR platforms like ADP and Gusto, expanding the ways employees can use their health budgets, and growing the team fast enough to keep up with employer demand,” he told MedCity News. “We’ve grown revenue nearly sevenfold in the last twelve months and we’re now working with more than 5,000 employers. The money is going toward making the switch from a traditional group plan to a health budget as seamless as possible for both employers and employees.”
Interest in ICHRAs is growing. The number of employers offering ICHRA grew from more than 6,600 in 2025 to more than 12,700 in 2026 — nearly doubling in one year, according to a recent report from the HRA Council. Advocates of the insurance model argue that it provides employees with more flexibility while providing employers with more budget control.
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Ultimately, Thatch aims to change the way the healthcare industry is funded, Ellis said.
“Right now healthcare is the only industry that calls its customers ‘patients,’ a word that literally means someone who suffers and waits. That’s not an accident,” he declared. “When an employer picks your insurance for you, the people actually competing for your business are HR benefits consultants, not you. We think that’s backwards. Every industry that’s gotten better for consumers — travel, telecom, even LASIK, one of the few parts of medicine people pay for directly — got better because the person receiving the service was also the one paying for it. Our bet is that healthcare works the same way once individuals hold the dollars.”
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