Thatch

Healthtech · Insurtech · Employee Benefits

Funding

Thatch raises $108M Series C, hits $1B valuation for health benefits

Employer health costs are projected to jump over 8% next year, the sharpest rise since 2003, pushing companies toward budget-based coverage.

• Thatch raised $108 million in a Series C round at a $1 billion valuation, led by The General Partnership, Index Ventures, General Catalyst and Andreessen Horowitz.
• Thatch runs a marketplace built on ICHRA (recently rebranded CHOICE Arrangement) that lets employers hand workers tax-free health budgets to buy their own individual insurance plan instead of one company-wide group plan.
• Strategic investors Eli Lilly and Paychex joined this round alongside ADP Ventures, a sign that drugmakers and payroll platforms are betting directly on the shift to individual coverage.
• Thatch's valuation jumped from $410 million to $1 billion in just 17 months, as revenue grew nearly 7x year-over-year and the platform passed 5,000 employer customers, including Jersey Mike's and Smoothie King.
• The number of employers offering ICHRA-style plans nearly doubled from about 6,600 in 2025 to over 12,700 in 2026, as employers look for alternatives to standard group plans that rarely cover treatments like GLP-1 drugs.
• Thatch's rise shows that unbundling health coverage into individual, consumer-directed budgets can scale fast even without an AI narrative, as rising employer costs and demand for treatments like GLP-1s outpace what standard group plans cover.