Sana raises $60 million to provide health insurance to more small businesses
Austin-based health benefits startup Sana announced Wednesday that it has raised $60 million in Series B funding, bringing its fundraising total to $107 million.
Sana co-founder and CEO Will Young said the funding was a sign 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 funding round,” Young said in a statement. “They believe in Sana’s mission and have been valuable partners over the past three years. They saw the opportunity before us and supported us every step of the way.
Sana hopes to disrupt the health insurance industry by offering small and medium-sized businesses health insurance plans that are 20% cheaper on average.
The company said in a statement that when entering a new market, 40% of its customers were small businesses that were previously unable to provide health care to their employees due to high costs.
Sana said it is able to offer lower prices because it is a vertically integrated company which, by negotiating and administering plans, is able to reduce middleman costs. Sana also cuts costs by using technology to automatically resolve 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 grown to serve small businesses and their employees in eight states.
In January, Sana partnered with primary care provider Proactive MD to provide members with a clinic, called Sana MD, located in 1715 W. 35th St. in Austin. Sana said the demand for appointments exceeded expectations, prompting the company to hire additional staff.
The company plans to use its Series B funding to fuel growth in new markets. When membership in these markets reaches critical mass, the company aims to open additional health centers to serve these members.
The new capital will also be used to grow Sana’s workforce, particularly with customer support roles needed to serve a 200% increase in customers, according to the company. Sana currently has 170 employees, and Young said he expects to end the year with nearly 200 employees. The new funding gives Sana the ability to continue to hire and grow despite financial market uncertainty, Young said.
“We are excited to use this funding to bring Sana and reliable, affordable healthcare to more small businesses and their employees,” said Young. “We have an incredible group of investors who are all experts in some aspect of our business, and their desire to continue investing in us is a strong affirmation that Sana offers a great solution to a big problem.”