Thatch, a platform that helps employers manage healthcare costs by offering workers individual insurance plan choices, raised $108 million in September 2026 at a $1 billion valuation. Existing investors — The General Partnership, Index Ventures, General Catalyst, and Andreessen Horowitz — backed the round.
The funding comes 17 months after Thatch closed a $40 million Series B at a $410 million valuation, representing a significant jump in valuation over a short period. The company also grew its annual recurring revenue approximately seven times, according to co-founder and CEO Chris Ellis.
Ellis co-founded Thatch in 2021 alongside Adam Stevenson, a former Stripe engineering executive. The company operates through a model called ICHRA (Individual Coverage Health Reimbursement Arrangement) — a federal regulation introduced in 2020, recently rebranded as CHOICE — that allows employers to set a fixed health budget per worker rather than enrolling all employees in a single company-wide plan. Workers then use those pre-tax funds to select from dozens of health, dental, and vision plans on Thatch’s marketplace. Thatch uses AI to recommend plans based on each employee’s needs.
Employees with leftover funds can spend them via a Thatch debit card on eligible health expenses, including GLP-1 medications such as Ozempic and Wegovy, which traditional health plans rarely cover. Those needing more comprehensive coverage can supplement their allowance out of pocket.
Two factors are driving demand for the platform. Employer healthcare costs are projected to rise more than 8% in 2027 — the largest increase since 2003 — while employee interest in treatments like GLP-1 drugs is growing. Ellis says the model removes the need for employers to renegotiate annually with major carriers like Anthem or United Healthcare, while creating competitive pressure among insurers to retain individual customers.
Thatch operates in a space that includes competitors such as Take Command, Remodel Health, and Zorro, all of which offer similar ICHRA-based alternatives to traditional employer health benefits.
Source: TechCrunch