There are just shy of 67M Medicare enrollees in the United States. Each of these beneficiaries had to select from 24,000+ options across the alphabet soup of the Medicare maze – Part A (hospital), B (provider), C (Medicare Advantage/Vision/Dental), and D (pharma benefits). The process can be daunting and confusing for seniors. Adding stress is the time-sensitive nature of the enrollment period. An entire industry has emerged to help individuals understand and choose their options. Chapter is a tech-enabled Medicare navigation platform. Using the company’s signature tech, a trained team of advisors determines plans that are best suited based on cost and coverage by analyzing each individual’s circumstances to understand health conditions, drug pricing, and provider capabilities. Insurance companies typically incentivize most Medicare advisors to enroll members. Naturally, these advisors steer members towards plans that offer the best compensation; often creating a misalignment between advisor and advisee. However, with Chapter, all advisors are full-time employees who are not commission-based, allowing all recommendations to be free of any bias. As plans, costs, and needs evolve, the company also works with consumers to assess if their current plans best meet their needs. All of Chapter’s services are free for the user.
AlleyWatch caught up with Chapter CEO Cobi Blumenfeld-Gantz to learn more about the business, the company’s strategic plans, latest round of funding, which brings the company’s total funding raised to $109M, and much, much more…
Who were your investors and how much did you raise?
Chapter raised a $50M Series C, which was led by XYZ Venture Capital with participation from existing investors Narya Capital, Addition, Susa Ventures, Maverick Ventures, Health 2047, and SV Angel.
Tell us about the product or service that Chapter offers.
Chapter ensures consumers get the right Medicare coverage for their needs at the lowest possible price. As the only unbiased Medicare navigation platform, Chapter aligns incentives between Medicare advisors and consumers by considering all options and making recommendations independent from economic relationships.
What inspired the start of Chapter?
My grandfather, Henry, lived with my parents and me when I was in high school. He relied heavily on my mom to deal with Medicare. When it came time for my parents to enroll in Medicare for themselves, they faced a similar maze—nearly missing deadlines and scrambling to enroll—only to choose a plan that cost them thousands more than alternatives with the same coverage.
When I sought to help my parents through the maze, I learned that most counties have 50+ Medicare plans, yet brokers aren’t required to look at all options, disclose how many they consider, or make recommendations absent of their own financial incentives.
We built Chapter to ensure we’re always recommending the right Medicare options for each person.
How is Chapter different?
Chapter provides a platform to quickly compare all plans available. Our Advisors ensure your prescriptions and doctors are covered under your plan – and that you have the benefits you expect. And to avoid mismatched incentives, our advisors are compensated identically regardless of the plan you choose. This means there’s never an incentive to suggest a plan that isn’t the absolute best option for you.
Our support never stops. We’ll help you understand your current plan or switch your coverage when you need to. We’re always here for you with free support every step of the way.
What market does Chapter target and how big is it?
There are about 67 million people on Medicare. Every day, 11,000 more Americans age into Medicare.
What’s your business model?
Chapter monetizes as a Medicare brokerage. Our services are free for users.
How are you preparing for a potential economic slowdown?
Medicare is insulated from macroeconomic trends. All Americans retiring need to enroll in Medicare, regardless of the macroeconomic environment.
This new funding allows us to accelerate when others are slowing down.
What was the funding process like?
We’ve been working with XYZ for a couple of years, and through getting to know them, we were both excited to deepen our relationship. The process was quite smooth as we’ve had a close working relationship with our investors.
What are the biggest challenges that you faced while raising capital?
Medicare is an antiquated market that hasn’t been touched by technology in a long time. As such, most technology investors are less familiar with its dynamics. Fundraising for a company that operates in the Medicare market can often require educating investors who are new to the field.
What factors about your business led your investors to write the check?
I think it comes down to the company’s performance to date, the opportunity size, and the differentiation we’re building.
Our unique value proposition enables us to access new distribution channels, which fuel highly efficient growth. We’ve grown 4x year-over-year with 5x less churn than the industry average. We’ve proven ourselves as the frontrunner in the category—and as the only broker invited to testify before Congress on necessary improvements to Medicare, we’re positioned to influence the customer experience on a policy level as well.
“Chapter has designed state-of-the-art technology that makes a truly best-in-class experience work at scale for seniors, while still providing deep, granular information on providers, drug pricing, and more,” says Ross Fubini, Managing Partner at XYZ Venture Capital.
“They’re also seeing this incredible pull from the ecosystem at large. Investment advisors, hospital groups, physicians — the biggest content sites devoted to seniors — they’re all eager to deliver better value to their customers and see Chapter as the way to do it. They’re exactly the type of team that makes us so excited to invest in the public sector, and work with folks like them from their earliest innings.”
What are the milestones you plan to achieve in the next six months?
We want to continue to grow at an even faster pace and expand the aperture of problems we’re supporting our members with.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I’m not really in a position to give advice, but I think the nature of building something differentiated is that most people won’t (and shouldn’t) agree with you. So it’s about finding the small number of people, investors, and partners who do.
Where do you see the company going now over the near term?
We’re scaling our core business as quickly as we can while exploring new product opportunities to help our members with more aspects of their retired lives. In the not-so-distant future, 70 million Americans will rely upon Chapter for their Medicare and retirement guidance.
What’s your favorite restaurant in the city?
I really enjoy Palma in the West Village.
