Thatch, a health benefits start-up that lets employers give staff a budget to buy their own insurance, said on September 15, 2026 that it had raised $108m in a Series C round at a $1bn valuation.
The money came mainly from existing investors The General Partnership, Index Ventures, General Catalyst and Andreessen Horowitz, with Scale Venture Partners, Avid Ventures, Quiet Capital, SemperVirens and QuantumLight also taking part. Eli Lilly, ADP Ventures and Paychex joined as strategic investors. The company did not name a lead investor.
According to TechCrunch, citing PitchBook, Thatch's previous round was a $40m Series B at a $410m valuation about 17 months earlier. MedCity News reported that Thatch has now raised $192.5m in equity funding.
“It's time for healthcare to have its 401(k) moment.”Chris Ellis, Co-founder and CEO, Thatch
What Thatch does
Thatch helps employers offer Individual Coverage Health Reimbursement Arrangements, or ICHRAs, which have recently been renamed CHOICE arrangements. Instead of choosing one group health plan for everyone, an employer gives each worker a tax-free allowance to buy an individual plan from a marketplace.
Employees can spend whatever is left on services sold through Thatch Market, such as therapy, cash-pay GLP-1 drugs and preventive diagnostics. Partners include Lyra Health and Function Health.
In the company's announcement, co-founder and chief executive Chris Ellis wrote that Thatch's vision was a world where healthcare is personal and people can buy better health, and argued that the roughly $6 trillion the US spends on healthcare each year should be steered more by consumers. "It's time for healthcare to have its 401(k) moment," he wrote. TechCrunch named Adam Stevenson, a former Stripe engineering executive, as the other co-founder.
Growth so far
Thatch says more than 5,000 employers use its platform, and MedCity News named Jersey Mike's and Smoothie King among them. Ellis told TechCrunch that annual recurring revenue had grown about sevenfold, and the company said revenue grew nearly seven times over the past twelve months. It did not disclose the revenue figure or its headcount.
Small businesses can sign up through payroll partners Gusto, Justworks and Paychex, and Thatch has a deeper integration with ADP RUN. In April, employers, brokers and employees from Venteur moved onto its platform.
What the money is for
Thatch said it will spend the funding on better tools to help members navigate healthcare, deeper partnerships with insurance carriers, more payroll integrations and an improved experience for businesses. Two of the strategic investors are already distribution partners: Thatch integrates with ADP RUN, and Paychex is one of the payroll providers through which small businesses can sign up.
Ellis told TechCrunch that employers were initially drawn to the model by rising costs, but were then finding it a more efficient way to provide cover. Thatch competes with other ICHRA providers, including Take Command, Remodel Health and Zorro, according to TechCrunch. Ellis also told the publication that because employees can switch plans if they are unhappy, insurers face pressure to compete on service, which he said could mean fewer denied claims.
Company website: thatch.com