The Idea:
Chris Ellis and Adam Stevenson both lost a parent to cancer at a young age. While it was happening, they saw a second fight running alongside the first: the fight to pay for care.
Years later, both were deep inside the healthcare machine. Ellis had started as a cancer researcher at MIT, built the US sales team at clinical software startup Sophia Genetics, then moved into product at Agilent. Stevenson had spent four years at insurance giant Humana, then seven at Stripe building and leading customer engineering teams.
In October 2021, they quit to help patients like their parents. They had no product in mind. So they interviewed patients, and one complaint kept coming up. It wasn't the care. It was paying for it.
Then they tried to buy health insurance for their own small team. It was their second biggest cost after salaries, it swallowed hours, and the result was still mediocre. If two healthcare insiders couldn't make it work, what chance did every other small business have?
This was the beginning of Thatch.
The Execution:
- October 2021: Ellis and Stevenson left their jobs in October 2021 to found Thatch, still unsure what shape it would take.
- February 2023: Thatch came out of stealth with a $5.6M seed round co-led by a16z and GV. With 8 staff, its first product was a wedge: an HSA, a debit card and text-based billing help layered on top of existing company plans. The real ambition was a marketplace where employers set a budget and staff pick their own insurance.
- August 2023: Thatch launched its ICHRA product, built on a 2020 federal rule letting employers give staff tax-free money to buy individual plans. It stopped patching the old system and started replacing it.
- September 2024: Index Ventures and General Catalyst led a $38M Series A, taking total funding to $44M.
- Early 2025: The founders realised ICHRA was really a fintech problem: budgets, issuing funds, tracking payments. So they hired from Stripe, Rippling and Ramp and brought in a former UnitedHealthcare regional CEO as chief growth officer.
- April 2025: Index led a $40M Series B at roughly 3x the Series A valuation. Thatch had onboarded 1,000+ companies in 18 months, grown revenue 8x year-on-year and hit 72 staff.
- September 2026: Existing backers put in $108M at a $1B valuation, 17 months after a Series B priced at $410M. Ellis says ARR grew roughly 7x.
- Today: Employer health costs are forecast to rise by more than 8% in 2027, the steepest jump since 2003. Thatch uses AI to match each worker to a plan, leftover budget goes on a debit card for things like GLP-1s, and it's racing Take Command, Remodel Health and Zorro for the market.
The lesson? Thatch's first product made paying medical bills slightly less painful inside a broken system. The billion-dollar business came from a 2020 rule change that let it rip that system out. Two founders who knew insurance and payments inside out saw that ICHRA was really a fintech problem, and hired for it.