Five years after the Affordable Care Act was signed into law in 2010, health insurance tech investing in the US roared to a new high in 2015 as investors poured over $1.2B across 40 deals.
On a year-over-year basis, funding to health insurance tech startups increased 120% in 2015, despite just a small uptick in deals. Driving the funding spike were Zenefits, Oscar Health, and Collective Health, which in aggregate raised $797M last year.
Health insurance tech takes smaller share of insurance tech pie
Interestingly, while funding to new startups in health insurance tech has largely driven the funding boom in insurance tech overall, 2015 saw non-health insurance tech startups nearly reach parity in terms of US deal activity. As the chart below highlights, health insurance-related startups took 51% of overall US insurance tech deal activity in 2015 vs. 70% in 2014.
California, New York take 63% of health insurance tech deals since 2013
California and New York, unsurprisingly, dominate health insurance tech deals by geography taking 44% and 19% of all deals since 2013, respectively. Among the early-stage (Seed/Series A ) health insurance tech deals in California in 2015 were private benefits exchange Hixme, out-of-network health insurance reimbursement service Glass Health, employer-focused health brokerage Lumity and consumer-focused health brokerage Stride Health.
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