New Web-Based Health Insurer, Oscar, Raises $30 Million
Seeking Alpha Analyst Since 2014
Last year, in 2013, most of the top startups were consumer-focused- places like Instagram, Uber, Warby Parker, etc. This is all well and good, but it's looking like 2014 might be the year for health-tech to take the lead. A new startup company, named Oscar, is looking to change the way that we look at health insurance. By the looks of it, it appears as though the market is reciprocating since a group of venture capitalists, including major VC Joshua Kushner, have invested around $30 million into Oscar.
Oscar, which has only been open for business since October 2013 has funders including the Founders Fund- the VC firm co-founded by Peter Thiel.
Since it's recent public launch, Oscar has grown extremely quickly- and based on the current round the company is valued at around $340 million. Kushner will remain chairman and his co-founders, Kevin Nazemi and Mario Schlosser will continue to run the firm on a daily basis.
Oscar is interesting in the way that it operates because, though it doesn't turn the traditional insurance industry model on its head, it is trying to make the experience of purchasing and maintaining health insurance much easier than it has been before. "Our ethos and mission is to create a good consumer experience. We wanted to create an experience like having a doctor in the family." Though Oscar still charges the normal deductible, it is focusing on other aspects of health insurance that will make their customer's lives easier; things like free generic drugs, free calls to doctors, and free primary care visits.
Presently Oscar is only serving the New York City area, but Kushner has affirmed that the company is seeking to eventually grow nationally. This growing process will be much easier since they are already licensed in the state of New York.
Though they're not changing the way health insurance operates, they are changing the way that it is perceived. At the moment health insurance (and debateably insurance in general) is thought of as a sort of faceless middleman. Through focusing on design, user interface, and technology Oscar hopes to change this perception. "People just don't have a relationship with that kind of [faceless] entity. The existing players don't care about satisfying the customer."
Though Oscar has already raised $75 million in it's brief tenure, those who are familiar with the company have disclosed that this isn't because of a high burn-rate. I'm hoping that other similar companies will arise in the near future because as we all know, health insurance and health tech two areas where there is a lot of improvement that can take place. Here's longer, healthier lives spearheaded by our interest in technology and our knowledge!
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