InsureTech Startup Sidecar Health Raises $20 Million in Funding

Sidecar Health, a California-based insurance startup focused on price transparency and direct payments for care, raised $20 million in a new funding round.

Cathay Innovation, an early-stage growth venture capital fund created in affiliation with Cathay Capital Private Equity, led the financing round with participation from new investors Comcast Ventures, Kauffman Fellows, and Anne Wojcicki, co-founder, and CEO of 23andMe.

According to the company, the funding will further accelerate its growth by expanding to new geographies and growing its team.

The startup says it is different from traditional insurance. In traditional insurance, a member pays a fixed amount for any eligible, medically necessary service or prescription medication that he buys.

Sidecar Health says its new approach or mobile app allows members to customize and design their health insurance plans based on their specifications and includes options like insurance price and providers comparison and shopping and a payment card.

“Plans offered by Sidecar Health successfully address the agency problem created by traditional health insurance. By empowering patients to be purchasers of healthcare and re-aligning incentives throughout the system, Sidecar Health members benefit from lower health costs and greater access. As our membership base increases, price transparency and consumer choice push down the average price of health care services for everyone,” said Patrick Quigley, CEO of Sidecar Health.

Sidecar Health says its health plans cover 170,000 medical services and prescription drugs. The company is currently operating in 11 states and expects to be available in several more by year’s end.

“The company is reinventing healthcare insurance plans for individuals and businesses by fixing both the incentives and the lack of price transparency that have plagued the U.S. healthcare system. With Sidecar Health’s unique technology and real-price data, people have access to the cost and coverage information needed to make health care decisions that has been missing from all health care transactions until now,” said Alexandre Lazarow, Investment Director at Cathay Innovation.

Early investors GreatPoint Ventures and Morpheus Ventures also participated in the round, bringing the company’s total to $40 million since its founding in 2018.

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Image Credit: Sidecar Health