Angle Health raises $58 million Series A

CEO Tai Wang told Axios that Angle Health’s $58 million Series A first round will bring the technology-backed insurance company to profitability.

why does it matter: Unit economics – like the path to break-even – is evolving increasingly for early-stage health technology companies and their investors.

How it works: Angle is a full-fledged health insurance company that offers customized healthcare benefits designed for small and medium businesses.

• In addition to providing benefits, the company offers Care Mobility to help members access behavioral health services, telehealth, and disease management.
• The company counts NFP, Gallagher, GBS/Leavitt, Aon and Hub among its clients.
• Wang says Angle is collaborating with Cigna to give its members access to a nationwide network of healthcare providers.

details: Wang says Angle generates “tens of millions” in revenue, but he declined to be specific.

• Portage led the tour, With participation from PruVen Capital, Wing Venture Capital, SixThirty Ventures, Mighty Capital, Wormhole Capital, Mindset Ventures, Aloft VC and Pilot founder Wassim Daher.
• The A series was raised in two tranches, Wang told Axios. Angle raised $21 million in equity and $10 million in debt over the summer before Portage came along to lead the infusion of another $27 million, he says.
• Existing investors are Blumberg Capital, Correlation Ventures, TSVC, and Y Combinator.

From the note: Publicly traded “insurers” such as Oscar Health, Bright Health Group and Clover Health – most of which operate in the direct-to-consumer health insurance market and therefore do not directly compete with Angle – have reduced their presence in the market trying to reach profitability.

what are they saying: Wang says the Angle customization sets it apart from other players in the market.

• Small and medium-sized businesses are “generally limited to ‘turnkey’ plans, which can make shifts confusing for their employees and disrupt existing access to care,” says Wang.
• “We can customize employer health plan packages based on their needs,” he says, noting that 80% of Angle’s health plans are tailor-made.

Between the lines: Portage has a long history of investing in the insurance sector in general, but Angle is North America’s first healthcare play.

• “Our LP base includes quite a few insurers with strong networks within the healthcare and health insurance industry,” says Portage partner Ricky Lai.

plot: Angle sees itself as the ultimate provider of care, as do its larger peers (cough, Optum), says Wang.

• “We primarily provide communication and coordination around these benefits, whether they are administrative or clinical,” says Wang. “There is definitely an opportunity and potential performance there to also be the actual medical care provider ourselves.”

Play status: Besides the major commercial insurers, independent third-party administrators such as Collective Health and Flume serve the employer-based benefits market.

• Last year, Flume Health He raised $30 million in Series A funding at a value of $100 million, while Collective Health raised in 2021 $280 million in Series F financing of $1.5 billion.
• TPAs serve such large companies (500 to 1,000 or more employees) that have the resources to design interiors and offer customized health plans—and don’t take any risks entirely, Wang says.
• “Even third-party administrative services, there are entry-level health plans that do exactly that, but they don’t underwrite or don’t take the risk,” says Angle co-founder Anirban Gangopadhyay.