Thatch AI: How This Fintech Healthcare Startup Raised $38M from Top SF Investors
An exclusive interview with Adam Stevenson, former engineering leader at Stripe and entrepreneur who spent the last decade scaling fast-growing startups in Silicon Valley.
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Adam Stevenson, a founder who moved to San Diego 12 years ago, spent a decade working in healthcare and software before launching a venture-backed startup.
Prior to co-founding Thatch with Chris Ellis, Stevenson built and exited several software ventures. He was also one of the first 150 employees at Stripe — which is widely known as one of the most successful startups in Silicon Valley.
After six years climbing the ranks from support engineer to head of solutions architecture, it was time for a change.
“I connected with my co-founder, Chris, who reached out to me cold. He wanted to talk about APIs in the healthcare space. We instantly hit it off.” said Stevenson. “We both knew we wanted to start something in the healthcare space that helped patients.
“On the same day Chris and I quit our jobs, Thatch was formed,” said Stevenson. “We raised $400,000 from leaders at Stripe as well as previous and current founders and operators, which allowed us to hire our first two team members.”
After launching in 2021, Thatch secured a $5.6 million seed round led by Andreessen Horowitz and Google Ventures. This momentum continued with a $38 million Series A led by Index Ventures and General Catalyst in September 2024.
The latest funding will expand Thatch’s offerings and team, positioning it as a leader in employee healthcare solutions. “Our big vision is to build a new way for companies to do healthcare,” said Stevenson.
Stevenson, who is originally from the Midwest, agreed to chat about Thatch’s accomplishments, how the 45-person startup was able to successfully raise venture capital from top San Francisco investment firms, and why he plans to remain in San Diego.
High-Level Overview
Founded in 2021, Thatch is the modern health benefits platform for startups and corporations.
The company’s mission is to help businesses give great healthcare to their employees in under five minutes.
Launched in San Francisco, it was co-founded by Chris Ellis and Adam Stevenson, both who are based in Austin TX, and San Diego, CA respectively.
Investors include Andreessen Horowitz, Google Ventures, Lux Capital, Quiet Capital, Not Boring Capital, BrightEdge, among others.
It has more than 40 employees and has raised $44 million in funding, to date.
Founding Story
Chris Ellis, Co-Founder CEO at Thatch, had started his career as a cancer researcher at MIT. He also led the sales team at Sophia Genetics, a clinical software startup, before working on the software product team at Agilent, a large biotech company.
Adam Stevenson spent four years at health insurance giant Humana, while launching a few bootstrapped SaaS companies on the side. He eventually landed at Stripe, where he started and led different customer engineering teams for nearly seven years.
The duo kicked off their founding journey interviewing dozens of patients and healthcare executives before landing on the premise behind Thatch.
After raising close to half a million in funding, the team spent twelve months getting broker and third party administrator licenses in all 50 States.
“Chris and I both left our jobs on the same day we started the company,” Stevenson explained on our Zoom call. “We raised around $400,000 from leaders at Stripe as well as previous and current founders and operators, which allowed us to hire our first two team members.”
“We spent our first year getting our broker and third party administrator license in all 50 states. We also went out to build bank partnerships so we could move money around,” said Stevenson.
Helping Companies with Healthcare
Thatch, is a financial tech company focused on improving how companies manage healthcare benefits with their employees.
The platform offers features like simplified budgeting, fund allocation for employers, and personalized plan options for employees.
Historically, health benefits were selected and offered by employers as a retention incentive, however today that has quickly changed as gig work economy grows and employees change jobs more frequently.
“This shift has largely helped drive demand for solutions like Thatch,” Stevenson said.
Today, Thatch has “hundreds” of paying customers ranging from AI startups and small businesses to nonprofits and large enterprises with thousands of employees.
“We started commercializing in August last year. From last August to now we have grown to hundreds of paying customers. We soon will have thousands of paying companies who are using us for their healthcare spending.”
“There have been a lot of different milestones that I’m proud of, but the fact that we’ve built something that so many companies are using — is something that we’re most proud of,” said Stevenson.
Raising from Top VCs
In September, it announced it had closed $38 million in a Series A led by Index Ventures and General Catalyst.
Other investors on its cap table include Andreessen Horowitz, Google Ventures, Lux Capital, Quiet Capital, Not Boring Capital, and BrightEdge.
The Series A funding will be used to expand Thatch’s features, add new accounts, and grow its 45-person team
"From the moment we met Chris and Adam, their deep market insight and compelling vision were unmistakable. Their relentless execution and ability to attract top talent made us confident they're building a category-defining company,” said Jahanvi Sardana, Partner at Index.
“Healthcare is the last major financial decision still controlled by employers but, like the shift from pensions to 401(k)s empowered individuals, healthcare is due for the same revolution. Thatch is driving this shift by harnessing free market forces in the individual market and pooling risk across businesses to create collective buying power,” said Sardana.
Moving to San Diego
While Thatch’s founding roots ties back to San Francisco, the startup is now a fully-distributed company with teams working across the U.S.
Stevenson, who now lives in Carmel Valley with his family, has no plans to leave what he calls paradise.
“I’m originally from the Midwest. I visited San Diego when I was 15 years old with my dad on a business trip and I thought it was paradise.”
“My life mission was to move there before I was thirty, so in my late twenties we saved up enough money and we sold everything we owned including our home and drove down to San Diego,” said Stevenson. “We’ve been here for 12 years.”
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