Thatch has raised $108 million at a $1 billion valuation, according to the company and TechCrunch. The round came from existing investors: The General Partnership, Index Ventures, General Catalyst, and Andreessen Horowitz.
The startup says the latest funding marks a sharp jump from its $410 million valuation 17 months ago. Chris Ellis, Thatch’s co-founder and CEO, told TechCrunch that annual recurring revenue has grown about 7x.
Thatch sells an individual plan marketplace for employers through a model known as ICHRA, which was created by federal regulation in 2020 and recently rebranded as CHOICE. Instead of negotiating one traditional healthcare plan for the whole company, employers set a fixed health budget for each worker. Employees then use those pre-tax funds to choose among dozens of health, dental, and vision plans on Thatch’s marketplace.
The company says workers can use leftover funds for other eligible health expenses, including GLP-1 drugs like Ozempic. Those who need more coverage can supplement their allowance out of pocket.
Ellis said the model creates pressure on insurers to compete for better service and fewer denied claims. He also said employers no longer have to renegotiate with carriers every year, while still providing similar coverage at a slightly lower cost.
Two forces are driving demand, Ellis said. Employer healthcare costs are projected to rise more than 8% in 2027, the largest increase since 2003, and employees want access to treatments that traditional plans rarely cover.
Thatch is not alone in chasing that opening. Competitors include Take Command, Remodel Health, and Zorro.
The bigger story is simple: when healthcare inflation keeps climbing, founders and employers both start hunting for a better unit economics story. Thatch is betting that a fixed budget, more choice, and more competition among insurers can do what the old one-size-fits-all model has not. If the company is right, the winners are employers under cost pressure and workers who want more control over coverage. If it is wrong, the bill still lands on the business side.
