Thatch Reaches $1B Valuation as Employers Hand Workers Health Benefits Budgets

Thatch raised $108 million to reach a $1 billion valuation, aiming to expand its health benefits platform. The platform enables employers to shift from traditional group health plans to a consumer-directed model, where they provide employees with a health benefits budget and the freedom to choose their own coverage. Employers set a defined budget, and employees utilize tax-free funds to select individual health plans, with any remaining balance covering eligible healthcare expenses.

Thatch's infrastructure and distribution network simplify this transition by connecting employers and employees to individual coverage, integrating with major insurance carriers, payroll providers, and benefits platforms. This eliminates the need for employers to rebuild their existing benefits infrastructure. The company's revenue has nearly tripled in the past year, and over 5,000 employers now utilize its platform.

Chris Ellis, Thatch's Co-Founder and CEO, emphasized that healthcare has typically been the one significant purchase people never actually made. With Thatch's approach, individuals can now control their healthcare dollars, prompting them to consider costs more carefully. In a previous funding round in April 2025, Thatch raised $40 million.

On average, half of Thatch's members have about $250 left over monthly, which they can use for expenses not covered by health insurance. In Thatch's Series C funding round, both existing and new investors participated. Jahanvi Sardana, a partner at Index Ventures, highlighted that Thatch is restructuring the healthcare market around the individual.

According to Sardana, AI will create a more comprehensive solution than mere shopping: an agent that knows individuals, holds their wallet, and can identify, book, and pay for the appropriate care. Sardana added that the real magic lies in transitioning from navigating healthcare to being effectively cared for.