StretchDollar Raises $6M to Simplify Small Business Health Benefits
Series of seed rounds led by Fika Ventures and Oscar Health, with additional partners including Precursor Ventures and Springbank
December 03, 2024 07:15 AM Eastern Standard Time
SAN FRANCISCO & PITTSBURGH–(BUSINESS WIRE)–StretchDollar, a 2023-founded startup dedicated to simplifying health benefits for small businesses, has announced the close of a series of seed rounds for a total of $6 million of funding, led by Fika Ventures and Oscar Health. Precursor Ventures and Springbank also participated in rounds that built on the company’s $1.8 million pre-seed funding from last fall. The additional capital will support the expansion of StretchDollar’s self-service platform and further elevate the small business benefits experience.
“Fika Ventures is thrilled to back StretchDollar’s mission to democratize healthcare access for small businesses through their innovative ICHRA platform that transforms a painful 100+ hour process into a 10-minute setup”Post this
StretchDollar is the only platform that allows small businesses to set up custom health benefits in just 10 minutes, completely free of charge. Through StretchDollar, small businesses can offer their employees pre-tax funding to buy individual insurance plans and employees get expert help making their plan selections.
“Small business owners didn’t start their companies to manage health benefits. I’ve yet to meet a small business owner who enjoys picking which hospitals their employees can go to, or which medications they’ll have access to. It’s a complicated and overwhelming task,” said StretchDollar, CEO and co-founder Marshall Darr. “Our solution keeps things simple, giving employees more choice while saving employers the hassle.”
StretchDollar leverages the IRS’s relatively new rule that formed Individual Coverage Health Reimbursement Arrangements (ICHRAs) — a mouthful of an acronym that delivers a straightforward benefit: allowing employers to use pre-tax dollars to cover employee healthcare expenses. StretchDollar’s model takes the complexity out of ICHRA, by focusing on the most burdensome healthcare expense: insurance premiums.
“Fika Ventures is thrilled to back StretchDollar’s mission to democratize healthcare access for small businesses through their innovative ICHRA platform that transforms a painful 100+ hour process into a 10-minute setup,” said Tianxiang (TX) Zhuo, General Partner with Fika Ventures. “With skyrocketing healthcare costs creating an unsustainable burden for SMBs, we believe Marshall and Kaiza’s proven track record and laser focus on the underserved small business segment positions them perfectly to capture a massive market opportunity in the rapidly growing ICHRA space.”
Teaming Up to Make Health Benefits More Accessible
In addition to securing funding, StretchDollar is working with Oscar Health and other carriers and organizations to make affordable health insurance coverage more accessible to America’s underserved small business sector and their employees.
“More than 50% of small businesses are unable to offer health insurance to their employees today,” said Mark Bertolini, CEO of Oscar Health. “Many businesses, especially those with less than 50 employees, do not have the resources to weather the skyrocketing costs of employer- sponsored plans. The individual market fills the gap: employers have an efficient way for employees to purchase health insurance and employees choose the plans that best fit their needs.”
Small Business Health Benefits: A Big Problem, A Simple Solution
Navigating health insurance in the U.S. is no small feat, especially for small businesses that lack the size to access self-funded plans or the Human Resources team to manage the group plan paperwork.
With StretchDollar’s ICHRA-focused model, employers set a fixed pre-tax monthly allowance that employees can apply toward insurance premiums, all managed within StretchDollar’s platform. Employees can receive guidance from licensed brokers to find health plans on the marketplace that best suit their needs.
Adam Treboutat, CEO of TNT Growth, a Miami-based advertising agency with employees on both coasts, shared his experience: “StretchDollar was significantly more affordable than what my PEO offered. My employees got to choose the plans they wanted, and I had everything set up in less than a day. It’s a win all around.”
StretchDollar prides itself on being as approachable and joyful as Dolly, its stretchy Daschund mascot—everything, they say, the insurance industry is not. To celebrate the funding milestone the company released a new series of Dolly-inspired videos:
About StretchDollar
StretchDollar is on a mission to make small businesses the best place in the world to work, starting by making health benefits simpler and more affordable for the five million smaller-sized small businesses in the United States. The company is founded by Gusto and health insurance industry alumni and headquartered in San Francisco, California, and Pittsburgh, Pennsylvania. Learn more at StretchDollar.com or email hello@StretchDollar.com.
Contacts
Ellen Decareau
Head of Marketing & Communications
(p) 512-300-3334
Ellen@StretchDollar.com
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