After receiving $12.5M last year, this health benefits startup laid off 25% of its staff
- Citing a tight investment market, Minneapolis-based healthcare startup Gravie slashed a quarter of its workforce.
- CEO Abir Sen told the Minneapolis/St. Paul Business Journal 21 employees were let go in order to conserve cash while venture capitalists wait out the current downswing in global markets.
- An April 2015 venture round netted Gravie $12.5 million from Split Rock Partners, Aberdare Ventures and FirstMark Capital.
Gravie wants to be the Uber in the health insurance space, offering users a free platform on which to shop, purchase and manage individual plans. The app also helps people search healthcare funding sources available to them, including tax credits introduced under the Affordable Care Act.
As of December, more than 700 businesses with over 20,000 employees had signed on to use the app. Revenues during the latest open enrollment period doubled from the previous period.
The firm sees a niche with the growing number of employers that are looking to outsource health benefits administration, and claims to have saved client companies an average of 36% on healthcare costs.
However, the layoffs could highlight the tight market it's playing in. While Gravie isn't acting as a carrier, layoffs coupled with the lukewarm reception to "hipster" health insurer Oscar could showcase how uber competitive the payer field is.
- Minneapolis/St.Paul Business Journal VC-backed health care startup Gravie cuts 25 percent of workforce