Devoted Health is after its most ambitious venture round yet, with the Waltham, Massachusetts-based insurtech seeking to raise another $1.2 billion on a valuation of $11.5 billion.
The company’s board has authorized Devoted Health to pursue a Series D round, according to a Delaware stock authorization filing that was first reported by Axios.
Prime Unicorn Index did not respond to an interview request. Devoted Health declined to comment.
The four-year-old startup counts 40,000 Medicare Advantage members in four states, more than doubling its senior members year-over-year and with its ambitions set on becoming a nationwide provider. It has so far raised a combined $812 million over four venture rounds, with investors including Oak HC/FT, Andressen Horowitz, Uprising Ventures and others, according to Crunchbase. Its next investment would value its shares at $56.25 each, more than triple its most recent Series C round’s $17.71 price. The company was started by Todd Park, who served as chief technology officer for the U.S. under the Biden administration.
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Devoted Health represents the last of a group of large insurtechs that have not gone public. If the company raises the $1.2 billion it desires, it will hold the largest valuation—and stock price— among the other insurance upstarts.
In June, Minneapolis-based Bright Health Group raised $924 million on a valuation of $11.2 billion; in March, Medicare Advantage startup Orange, California-based Alignment Healthcare raised $391 million on a valuation of $3.3 billion; the same month, New York-based Oscar Health raised $1.2 billion on a valuation of $7 billion; and at the start of the year, Nashville-based Clover Health went public via special-purpose acquisition company merger on a valuation of $3.7 billion.
Stock prices for nearly all of these companies have fallen since their public debuts. Alignment Healthcare’s share price has remained essentially flat.
While these venture-backed health plans are gaining momentum, they represent just 1% of total Medicare Advantage enrollment, with the market continuing to be dominated by UnitedHealth Group, Humana, CVS and other legacy players according to The Chartis Group. But the potential of the growing and lucrative Medicare Advantage market continues to attract new market entrants.
At least three new venture-backed plans entered the market in 2021. Westminster, California-based Clever Care Health Plan, which has raised $103 million; Charlotte, North Carolina-based Troy Medicare, which has raised $21.3 million; and Chicago-based Zing Health, which has raised an undisclosed amount of funding, all entered the fray.