Thatch, a California-based health benefits platform, announced it raised $38 million in a Series A funding round led by General Catalyst and Index Ventures. New investors SemperVirens and The General Partnership also participated, alongside existing investors Andreessen Horowitz (a16z) and Avid Ventures. Thatch specializes in offering Individual Coverage Health Reimbursement Arrangements (ICHRA) plans, allowing employers to set monthly allowances for employees, who can then choose health plans that fit their individual needs. This model provides greater transparency and control for both employers and employees.

Thatch plans to use the funding to expand its workforce, accelerate growth, and enhance its technology platform. The company aims to offer a strong value proposition: employees gain more choice and quality in healthcare, while employers benefit from better visibility on spending. Alex Tran, managing director at General Catalyst, expressed optimism about Thatch’s potential to drive healthcare innovation by focusing on quality, transparency, and cost control.

Market Snapshot: The employee benefits space has seen increased innovation from digital health companies like Personify Health, which combines wellness and benefits analytics, and Lyra Health, which focuses on mental health services. Thatch’s flexible ICHRA approach positions it to compete in this growing sector, alongside players like Accolade and Virgin Pulse.