Oscar Health Insurance, now valued at $1.5 billion, plans to use its latest round of funding to expand its service to more states.
The New York City start-up, which went live in October of 2013, announced Monday it had raised $145 million from a group led by Peter Thiel and his Founders Fund venture capital firm. Horizon Ventures, the Wellington Management Company, and Goldman Sachs were also part of the group, The New York Times reported.
Oscar is currently only available in the states of New York and New Jersey, but plans on offering its technology-centric healthcare insurance in more states this year, founder and chairman Joshua Kushner told The New York Times. Kushner did not specify which states but Fortune reported in December the company planned to expand to Texas and California in late 2015.
“There has been such strong customer satisfaction, we thought we were ready to push the product forward,” he told The New York Times.
Kushner started Oscar because he said the insurance industry lacked innovation and an option that paid close attention to customer service. He and his co-founders, Mario Schlosser and Kevin Nazemi, initially approached insurers about partnering to build technology for them but the companies were disinterested. The trio then decided to start their own company.
The company’s website and mobile applications are simple and allow customers to search symptoms and view maps showing doctors in their network. It also partnered with Misfit Wearables earlier this year and is offering to pay customers who wear a fitness tracker $1 for each week they traverse a certain number of steps. The hope is the hip technology and marketing with lure young enrollees. The health insurance company’s cartoonish New York City ads were abundant this fall leading up to December’s open enrollment period.
Oscar currently has enrolled more than 40,000 customers which equates to approximately $200 million in annual premiums collected and between 12 and 14 percent of marketplace for individual health insurance in New York, the company told Fortune.
Other health insurance companies are attracting venture capital investors as well. In 2014, health insurance companies raised $308 million across 32 round of funding, according to Crunchbase data. Only $88 million was raised in 2013.