Sana Raises $60M to Provide Health Insurance to More Small Businesses
Austin health benefits startup Sana announced Wednesday that it raised $60 million in Series B financing, bringing its overall fundraising total to $107 million.
Sana co-founder and CEO Will Young said the funding is a signal of investor confidence. The round was co-led by Trust Ventures and Gigafund, which have funded Sana since its $6.3 million seed round in 2019. Gigafund and Trust Ventures also participated in Sana’s $20.8 million Series A in 2020 and its $20 million Series A extension in 2021.
“Trust Ventures and Gigafund have been investors since our seed round,” Young said in a statement. “They believe in Sana’s mission and have been valuable partners over the last three years. They’ve seen the opportunity that lies ahead and have supported us every step of the way.”
Sana hopes to disrupt the health insurance industry by providing small and medium-sized businesses with health insurance plans that are 20 percent cheaper on average.
The company said in a statement that when it enters a new market, 40 percent of its customers are small businesses that were previously unable to provide health care to employees due to the high costs.
Sana said it is able to offer lower prices because it is a vertically integrated company that, by brokering and administering plans, is able to cut out middle-man costs. Sana also reduces costs by using technology to auto-adjudicate claims, automate back-end services and create an intuitive enrollment process that reduces the need for customer support calls.
Over the past two years, Sana has expanded to serve small businesses and their employees in eight states.
In January, Sana teamed up with primary care provider Proactive MD to provide members with a clinic, called Sana MD, located at 1715 W. 35th St. in Austin. Sana said the demand for appointments has surpassed expectations, prompting the company to hire additional personnel.
The company plans to use its Series B funding to fuel growth in new markets. When membership in those markets reaches a critical mass, the company aims to open additional health centers to serve those members.
The fresh capital will also be used to expand Sana’s workforce, particularly with customer support roles needed to serve a 200 percent increase in clients, according to the company. Sana currently has 170 employees, and Young said he plans to end the year with nearly 200 employees. The new funding gives Sana the ability to continue hiring and growing amidst the uncertainty in financial markets, Young said.
“We’re excited to use this funding to bring Sana and reliable, affordable health care to more small businesses and their employees,” Young said. “We have an incredible group of investors who are all experts in some facet of our business, and their desire to continue to invest in us is a strong affirmation that Sana is offering a great solution to a big problem.”