This Company Hit $1 Billion Valuation Without Being an AI Startup

Every hot startup this year seems to have “AI” somewhere in its pitch. But Thatch just raised $108 million at a $1 billion valuation with the idea of making healthcare cheaper.

That’s a major jump from its $410 million valuation just 17 months ago. The company grew its annual recurring revenue roughly 7x, CEO and co-founder Chris Ellis told TechCrunch. Thatch helps employers offer workers an individual health plan marketplace instead of one-size-fits-all coverage, using a model called ICHRA, recently rebranded CHOICE.

Here’s how it works: employers set a fixed budget per employee instead of negotiating one plan for the whole company. Workers then shop a marketplace of dozens of health, dental and vision plans, and pocket any leftover funds for other health expenses, including GLP-1 drugs like Ozempic.

Two forces are driving the growth. Employer healthcare costs are projected to jump more than 8% in 2027, the biggest increase since 2003, and employees want access to treatments their old plans wouldn’t touch. “People are waking up to this because of costs,” Ellis said, “but then they’re realizing this is a better, more efficient way to do it.”

Every hot startup this year seems to have “AI” somewhere in its pitch. But Thatch just raised $108 million at a $1 billion valuation with the idea of making healthcare cheaper.

That’s a major jump from its $410 million valuation just 17 months ago. The company grew its annual recurring revenue roughly 7x, CEO and co-founder Chris Ellis told TechCrunch. Thatch helps employers offer workers an individual health plan marketplace instead of one-size-fits-all coverage, using a model called ICHRA, recently rebranded CHOICE.

Here’s how it works: employers set a fixed budget per employee instead of negotiating one plan for the whole company. Workers then shop a marketplace of dozens of health, dental and vision plans, and pocket any leftover funds for other health expenses, including GLP-1 drugs like Ozempic.

Two forces are driving the growth. Employer healthcare costs are projected to jump more than 8% in 2027, the biggest increase since 2003, and employees want access to treatments their old plans wouldn’t touch. “People are waking up to this because of costs,” Ellis said, “but then they’re realizing this is a better, more efficient way to do it.”