Healthcare Insurance Startup Sana Benefits Raises $20.8 Million

Will Young and Nathan Hackley, Co-Founders of Sana Benefits, photo courtesy of Sana

Sana Benefits, the startup disrupting the healthcare insurance industry by providing coverage for small businesses at a discount, announced Wednesday that it has closed on $20.8 million in funding.

To date, Sana, founded in 2017 by Will Young and Nathan Hackley, has raised $27.1 million.

The latest round of funding came from existing investors, said Young, Co-Founder and CEO of Sana Benefits. Talks about raising the Series A round started late last year, he said. Gigafund led the round with participation from Trust Ventures and mark vc.

“I think what’s really exciting about raising the money is, for one, it’s a validation that we are actually making progress against our mission to make quality healthcare more accessible, understandable and affordable,” Young said. “We are able to raise money because we delivered results against that.”

Sana has also expanded its sales outside of Texas and is now available in the state of Kentucky and plans to launch in Illinois in the fourth quarter of this year, Young said.

The pandemic has not slowed its business, Young said. The demand for affordable healthcare plans for businesses continues, he said. Sana Benefits’ membership has grown 10X in the past year.

Sana Benefits provides an alternative to big insurance providers like Aetna, Anthem Blue Cross Blue Shield, United Healthcare, Cigna and Humana. It competes with them by providing insurance that is, on average, 30 percent cheaper, Young said. Sana’s platform covers health, vision, dental, telemedicine and maternity, in addition to benefits like ClassPass.

Sana moved to Austin from San Francisco in 2018 and has expanded dramatically. At the start of the year, Sana had 37 employees, and today it has 80, Young said. And the healthcare insurance technology startup continues to hire in the areas of sales, marketing, operations and engineering, he said. It might double again in size by next year, he said.

“As we scale, we have to grow the team,” Young said.

Sana’s headquarters at Manchaca and Slaughter Lane in South Austin are vacant right now. The company’s workers are all performing their jobs remotely. And Young said he doesn’t know when they will return to the office.

“We won’t require people to go back to the office for a long time,” he said.

In a lot of ways, Sana was better prepared than most startups to have its employees work virtually, Young said. Hackley, Sana’s co-founder, has been working remotely from Ohio since the company started. And Sana has grown, in part, by tapping into talent pools outside of top-tier cities, Young said.

And Young and his wife recently had their first child. Working remotely with a baby has given him a lot of empathy for parents juggling work and home responsibilities during a pandemic, he said.