San Francisco-based health insurance startup Thatch has secured $108 million in a new funding round, reaching a valuation of $1 billion. The investment was led by existing backers, including General Catalyst, Index Ventures, The General Partnership, and Andreessen Horowitz. Additional participants included ADP Ventures, Paychex, Eli Lilly and Company, Scale Venture Partners, QuantumLight, SemperVirens, Quiet Capital, and Avid Ventures.
Founded in 2021 by Chris Ellis and Adam Stevenson, the company has grown to approximately 200 employees. This latest round follows a $40 million Series B in April 2025, which valued the business at $410 million. In total, Thatch has raised nearly $193 million. The company reports that its revenue has increased nearly sevenfold over the past year, with more than 5,000 employers currently using its platform.
Thatch provides a platform where employers offer tax-free monthly budgets instead of traditional group health plans. Employees use an AI-powered marketplace to select individual health, dental, and vision coverage. Remaining funds can be used for eligible expenses via a company debit card. The service integrates with payroll providers such as ADP, Paychex, Gusto, and QuickBooks to facilitate adoption.
The funding arrives shortly after the federal government rebranded the Individual Coverage Health Reimbursement Arrangement (ICHRA) as the CHOICE Arrangement on September 3, 2026. According to the HRA Council, over 20,000 U.S. businesses now offer these arrangements, covering more than 500,000 employees. The market faces competition from firms like Take Command, Remodel Health, and Gravie.
