US$125m Series C nets Sidecar Health unicorn status
Sidecar Health has become the latest insurtech to reach a $1bn valuation, which it attained following a successful $125m Series C funding round.
The startup’s platform allows customers to define how much health coverage they need, including deductibles and prescriptions, and then visit any licensed healthcare provider they desire for treatment.
Members receive a dedicated payment card from Sidecar; when a transaction is processed, 20% (‘estimated expense’) is charged to the user’s designated payment method and the remaining 80% (‘estimated benefit’) is advanced to the plan.
Once the card is used an itemised expenses bill will be generated. Customers then submit a photo of the bill to Sidecar, which will determine the user’s eligibility and inform them if they paid too much or too little. The user will be credited in the first instant and debited in the latter.
Healthcare’s biggest idea in two decades
The company’s Series C round was led by Drive Capital and featured new investment from BOND, Tiger Global and Menlo Ventures, as well as returning backers Cathay Innovation and GreatPoint Ventures.
Enthusiasm and hype for Sidecar’s innovative approach is already significant: membership increased sharply over 2020, the service has a 4.5/5 score on Trustpilot, and Noah Knauf, General Partner at BOND, called it “the biggest idea I have seen in almost two decades of investing in healthcare.”
Sidecar’s overall philosophy, explains Patrick Quigley, Co-Founder and CEO, is based on the principle that consumers can be capable healthcare purchasers. By adding an unprecedented level of transparency (for a US system), wherein customers can shop for the best deal like other comparison websites, a new era of healthcare could be on the horizon.
"The plans we designed give Sidecar Health members two things: the money they need to purchase care and the information to make decisions that are right for them.
"By doing so, we are turning patients into purchasers of healthcare. This latest funding accelerates us on our mission to make healthcare more affordable and accessible for all Americans," he said.
Using its newly secured funds, the company plans to expand its geographic footprint, its team and develop a new line of products for the uninsured market. According to Sidecar’s official press release this could include an “ACA or ‘Obamacare’” package in 2022.
Image credit: Sidecar Health
Global investment in insurtech reaches all-time high
Global investment in the InsurTech sector reached an emphatic record during H1, 2021, as half-year funding of US$7.4 billion exceeded full-year investment in 2020, and in every other year, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
It was found that the latest quarter saw 162 deals yield more than $4,824 million in investment, a 210% increase over Q2, 2020. The enormous quarterly total, itself more than any annual total before 2019, was driven largely by 15 mega-rounds of $100 million or more. Collectively, these deals reached $3.3 billion, or two-thirds of total funding during the quarter. The money was raised predominantly by later-stage players seeking expansion.
A need for the insurance community to reflect digital changes
Series B and C fundraisings drove a large number of deals in the second quarter, but the number of early-stage deals also increased. They were up by more than 9% from the previous quarter, and 200% from pandemic-stricken Q2, 2020. As a percentage of overall deals, early-stage activity held roughly steady, at 57%.
InsurTechs focused on distribution accounted for 55% of start-up deals, and for 10 of the 15 mega-rounds. Most of the distribution InsurTechs target reduced dependence on agent channels. Of all Q2 deals, 73% were for P&C-related InsurTechs, while 43 companies raised funds for L&H technology. Funds were raised by companies from 35 countries, including new entrants Botswana, Mali, Romania, Saudi Arabia, and Turkey.
Dr. Andrew Johnston, global head of InsurTech at Willis Re, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours. Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition. Those that use it to redefine service in the insurance world will thrive. That means a positive future for InsurTechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”