StretchDollar raises $6 million

Health insurance broker StretchDollar announced the close of a series of seed rounds for a total of $6 million of funding, led by Fika Ventures and Oscar Health. Precursor Ventures and Springbank also participated in rounds that built on the company’s $1.8 million pre-seed funding from last fall. The additional capital will support the expansion of StretchDollar’s self-service platform and further elevate the small business benefits experience.

Founded in 2023, StretchDollar allows small businesses to offer their employees pre-tax funding to buy individual insurance plans. Employees get help from StretchDollar while making their plan selections.

StretchDollar leverages an IRS rule that formed Individual Coverage Health Reimbursement Arrangements, which allows employers to use pre-tax dollars to cover employee healthcare expenses.

StretchDollar is working with Oscar Health and other carriers and organizations “to make affordable health insurance coverage more accessible to America’s underserved small business sector and their employees.”

“Small business owners didn’t start their companies to manage health benefits. I’ve yet to meet a small business owner who enjoys picking which hospitals their employees can go to, or which medications they’ll have access to. It’s a complicated and overwhelming task. Our solution keeps things simple, giving employees more choice while saving employers the hassle.” – StretchDollar, CEO and co-founder Marshall Darr.

“Fika Ventures is thrilled to back StretchDollar’s mission to democratize healthcare access for small businesses through their innovative ICHRA platform that transforms a painful 100+ hour process into a 10-minute setup. With skyrocketing healthcare costs creating an unsustainable burden for SMBs, we believe Marshall and Kaiza’s proven track record and laser focus on the underserved small business segment positions them perfectly to capture a massive market opportunity in the rapidly growing ICHRA space.” – Tianxiang (TX) Zhuo, General Partner with Fika Ventures.

“More than 50% of small businesses are unable to offer health insurance to their employees today. Many businesses, especially those with less than 50 employees, do not have the resources to weather the skyrocketing costs of employer- sponsored plans. The individual market fills the gap: employers have an efficient way for employees to purchase health insurance and employees choose the plans that best fit their needs.” – Mark Bertolini, CEO of Oscar Health.

Bottom Line: We covered StretchDollar as part of our “US Group Insurance” report published in Jan 2024.