The rush to digital is reshaping the health insurance market. Incumbents are making investments in digital to defend their positioning while a new crop of entrants is looking to disrupt the industry with technical savvy. Vericred has positioned itself at this crossroads with its data exchange and technology platform for insurers with a robust of APIs to reduce administrative and medical costs while also leading to revenue growth. The company’s infrastructure platform allows insurers to deliver digital experiences and services, improve sales tools, manage member relations, and more. The company views itself as providing the pipes that are powering the new digital insurance economy to meet the needs of consumers, brokers, employers, and employees alike with smart solutions.
AlleyWatch caught up with CEO and Cofounder Michael Levin to learn more about the adoption of digital within the insurance and benefits industry, the company’s strategic plans, latest round of funding, which brings the total funding raised to $34.1M, and much, much more.
Who were your investors and how much did you raise?
We raised a $23 million, oversubscribed Series B led by Aquiline Technology Growth with participation from new investors Echo Health Ventures, MassMutual Ventures, Guardian Strategic Ventures, and existing investors Riverside Acceleration Capital, FCA Venture Partners, and First Health Capital Partners.
Tell us about the product or service that Vericred offers.
Vericred is the way health insurance carriers and employee benefits providers connect with new technology partners to deliver seamless quote-to-card consumer experiences. We are not the websites or apps you use to choose a plan or find a doctor. We are infrastructure. We are the ‘pipes’ that simplify the complex exchange of quoting, enrollment, and eligibility data between carriers and the technology partners responsible for delivering health and employee benefits to hundreds of millions of Americans every day. Our APIs transmit billions of data points between InsurTech and insurance carriers, powering digital distribution across the insurance industry.
What inspired the start of Vericred?
Amazon, Netflix, Apple, and others have reset expectations about how consumers access, purchase, and experience goods and services. Insurance, however, lags behind many categories. It is, as most people have encountered, an inefficient marketplace that has not yet succeeded in harnessing technology to create a seamless digital experience. Why? Because our industry has lacked connectivity between insurance carriers and digital platforms that brokers, employers and consumers use to shop for and manage insurance products.
Vericred was born of our conviction that without industry-wide connectivity, without a simplified means of data exchange, digital transformation in health and benefits would remain stagnant, lacking in transparency, innovation, and efficiency. Today, our platform is the industry leader in building the infrastructure for the digital distribution and fulfillment of health insurance and employee benefits.
How is Vericred different?
From our inception, we’ve known exactly who we are: Vericred is laser-focused on connecting the health and benefits industry. We are the middle, the “pipes” uniting this intricate ecosystem of insurance carriers and the many different platforms where coverage is quoted, enrolled, and managed. We do not build user-facing applications. Instead, we’re operating in the background, doing the dirty work so our customers can build intuitive, seamless digital experiences for consumers, brokers, employers, and employees.
What market does Vericred target and how big is it?
The health and benefits industry is a $1 trillion industry affecting almost every American. More than 300 medical and ancillary carriers and 100+ InsurTech companies have already joined Vericred’s platform, aligning with our shared vision for a universally connected benefits ecosystem.
What’s your business model?
We are a multi-sided B2B data services platform. We license data and charge for transactions processed by our platform.
How has COVID-19 impacted the business?
COVID has been a tailwind for our business. It has shined an even bigger spotlight on the gaps in connectivity and prompted health insurance carriers to fully embrace the distribution of their products to third-party technology partners. If ever there was a time for Americans to have at their fingertips accurate, timely information about their health insurance plan, this is it. Likewise, if benefits brokers and employers had not adopted digital solutions for quoting and enrollment before Covid-19, they certainly have at this point. Overall, the pandemic has proved an accelerant for the digital transformation of our industry.
COVID has been a tailwind for our business. It has shined an even bigger spotlight on the gaps in connectivity and prompted health insurance carriers to fully embrace the distribution of their products to third-party technology partners. If ever there was a time for Americans to have at their fingertips accurate, timely information about their health insurance plan, this is it. Likewise, if benefits brokers and employers had not adopted digital solutions for quoting and enrollment before Covid-19, they certainly have at this point. Overall, the pandemic has proved an accelerant for the digital transformation of our industry.
What was the funding process like?
We ran a fast and close process with VCs that have been watching us for some time. In fact, we’ve known almost all of our investors for three or four years. This allowed us to move very quickly from start to funding in three months.
What are the biggest challenges that you faced while raising capital?
While we had the benefit of long-term relationships with our investors, not being able to meet face-to-face was a challenge. Investors are partners, and chemistry matters. It is significantly more difficult to assess chemistry over Zoom.
What factors about your business led your investors to write the check?
The most important factor was that these investors have been watching us and we did what we said we were going to do. Our execution and the magnitude of the opportunity provided for a compelling investment.
What are the milestones you plan to achieve in the next six months?
Our focus over the next six months is all about scaling our team. We are going from 50 employees currently to 100-125, seeking the best of the best to join us on this journey. Building the right growth team is the most important goal for us this year.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Build relationships now, do not wait until you need to raise. And do what you say you are going to do!
Where do you see the company going now over the near term?
We are very focused on enabling “digital quote-to-card” which is the complete distribution life cycle of health and benefits. Doing so will bring efficiency and transparency to the market and allow for greater innovation.
What’s your favorite outdoor dining restaurant in NYC
We haven’t been doing much dining out, but L’Amico at the Eventi hotel, just a few blocks from our office, is great!
