Startup Loop Health raises $12 mn from Elevation Capital, Vinod Khosla

The health insurer has grown significantly, insuring over 50,000 members across 150 firms in the past 12 months and growing 50% month-over-month amid the pandemic

Loop Health, a Pune-based health insurance startup, has raised $12 million in a Series A round co-led by Elevation Capital and General Catalyst. This round saw participation from other investors including Vinod Khosla (through Khosla Ventures), YC Continuity Fund, and Tribe Capital. It also featured leading angels including NoBroker founder Amit Kumar AgarwalLivspace founder Ramakant Sharma, Meesho co-founders Vidit Aatrey and Sanjeev Barnwal.

Loop targets covering 1 million members by the end of 2022 and 5 million members across Southeast Asia in the next five years. The company will use the fresh funds to scale the business and sales, focus on product development through custom insurance products (including wellness) and physical healthcare clinics, and drive strategic hiring, mainly in the sales and engineering verticals.

“My experience of working with clinics in villages helped me see first hand how patients are at a disadvantage because they lack medical knowledge,” said Mayank Kale, Co-founder and CEO, Loop Health. “The healthcare system has the incentive to over-prescribe medication and suggest unnecessary procedures. This is something we want to fundamentally change. At Loop we’ve put our doctors on the same side as the insurer. Our goal is to provide excellent primary care in order to prevent sickness and avoid hospital visits. This results in lesser claims for insurers, and more affordable insurance.”

Loop Health has witnessed significant growth, insuring 50,000 members across 150 companies in the last 12 months and growing 50 per cent month-over-month. Its corporate team has also grown from 10 to 80 employees in this period and is currently operational in Pune, Mumbai, and Bengaluru. Amit Punchhi, former CBO and CIO at HDFC Life, recently joined as President in a valuable addition to the founding team and company.

Vinod Khosla, founder, Khosla Ventures said Care delivery in India has many pain points with conflicting incentives. “Loop is changing the cost equation by allowing payers and providers to work together,” said Khosla. “Through its unique product and affordable pricing, Loop Health has a significant competitive advantage.”

Group health insurance (benefits) is a largely underpenetrated segment in the country—it is mainly bought by company human resources from traditional offline brokers. Existing brokers tend to neglect the mid-market and small business segments (often served by small brokers or not served at all) as they typically concentrate on large enterprise customers. And, their offerings are limited to plain vanilla health insurance with no health benefits.

“Health insurance is at a very nascent stage in India with only 10 per cent of the total population covered, excluding public sector schemes, leading to high out-of-pocket healthcare expenditure,” Mayank Khanduja, Partner, Elevation Capital. “Moreover, employer-provided health insurance has been growing at 20-25 per cent and it is likely to accelerate further post-Covid.”

Today, in addition to offering traditional hospitalization insurance, Loop enables their client companies to help their employees (and their families) avail proper healthcare services without the hassle of visiting clinics, waiting in line, and paying for each appointment.

“Loop team is building something incredibly differentiated in the Indian market where insurance is nascent and the opportunity to drive better health outcomes is massive,” said Hemant Taneja, Managing Partner, General Catalyst.

Through the mobile app, members can get access to preventive care, a dedicated medical advisor, and a team of doctors any time. Additional health and wellness benefits include yoga and meditation sessions, mental health consults, easy access to and discounts on lab tests and medicines, along with personalized care planning. For example, for one of their client companies, they curated a “home quarantine kit” to cater to the medical needs of a person who was isolated at home.

Before starting Loop Health, Mayank Kale built digital health records for half a million patients across India. During that time, he recognized a fundamental problem—primary care doctors get paid to treat patients when they are sick, not to keep them healthy. He wanted to start a business that would actively take care of people and was incentivised to keep them healthy. By bundling insurance and primary care, this is possible.