Thatch Secures $40M Series B to Redefine Health Benefits from San Francisco
Thatch has secured a $40M Series B funding round led by Index Ventures, with participation from Andreessen Horowitz, General Catalyst, and ADP Ventures. The company aims to revolutionize employee healthcare by replacing outdated employer-controlled benefits with a personalized, tax-free healthcare budget model powered by AI and embedded APIs. With over 1,000 businesses onboard since its 2023 launch, Thatch continues to scale rapidly through HRIS integrations and broker partnerships. Former UnitedHealthcare executive Gary Daniels joins as Chief Growth Officer to accelerate growth and industry alignment.
San Francisco–based healthtech startup Thatch has raised $40 million in a Series B funding round led by Index Ventures, with participation from Andreessen Horowitz (a16z), General Catalyst, ADP Ventures, SemperVirens, The General Partnership, and PeopleTech Partners. The company, founded with the mission to modernize employee healthcare, is tackling a long-standing flaw in the U.S. benefits system: lack of personalization and flexibility in employer-sponsored health insurance.
Thatch’s platform offers an ICHRA-powered, tax-free health benefits model that allows companies to allocate a fixed healthcare budget to employees, who then choose their own insurance plans — including health, dental, and vision — based on personal preferences and needs. Any remaining funds can be used for qualified healthcare expenses such as prescriptions, therapy, and preventive diagnostics.
Since launching in late 2023, the company has served over 1,000 businesses, from startups to established enterprises. Thatch also partners with leading HRIS platforms such as QuickBooks and collaborates with major insurance brokers and consultants. The company’s infrastructure includes AI-powered plan recommendations, receipt compliance automation, and a first-of-its-kind embedded API that enables partner platforms to distribute ICHRA directly within their own products.
A key highlight of this round is ADP, the world’s largest payroll provider, joining both as an investor and strategic partner. In addition, Gary Daniels, the former CEO of UnitedHealthcare’s Pacific Northwest division, has joined Thatch as Chief Growth Officer to support operational scaling and deepen insurance partnerships.
“This funding round will allow us to expand our product capabilities, grow our team, and integrate even more deeply with insurance and payroll systems,” said Adam Stevenson, co-founder and President of Thatch. “Our goal is to make healthcare benefits personal, portable, and accessible for every American worker.”
The Series B round positions Thatch as a key innovator in the HR and health benefits ecosystem. With rising dissatisfaction around traditional employer-sponsored plans, Thatch’s model aligns with a broader shift toward employee-driven benefit strategies.
As the company scales, it remains focused on building what it calls a “healthcare system people love” — one that prioritizes autonomy, transparency, and adaptability in how employees access and manage their healthcare.
