Beam Benefits founder's new startup draws $21M seed funding
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Beam Benefits co-founder Alex Frommeyer is back with a new Columbus startup that just secured $21 million to rethink how employers provide health insurance.
Why it matters: Frommeyer sees the impressive seed funding round as part of a rising tide for Columbus startups.
- Investment was led by national venture capital firms 8VC and A*, with Ohio-based Heartland Ventures and The OHIO Fund.
How it works: Stack uses individual coverage health reimbursement arrangements (ICHRAs), introduced in 2020, to help businesses set an insurance amount and reimburse health care spending.
- For instance, if an employer spends $500 monthly per person on health benefits, Stack allows them to instead provide a $500 monthly health allowance, enabling individuals to choose their own policies based on preferred doctors and other factors.
- The idea is to avoid huge annual increases in group costs.
By the numbers: Stack says employee health care prices have increased five years in a row, up around $400 from last year.
- Employers are bracing for an 11% jump in 2027, the largest in more than 20 years.
Between the lines: This isn't a novel idea — but the difficulty of ICHRAs comes in a company's understanding of the math and market nuances to make it work for them and their employees.
- "That's where Stack enters the process," Frommeyer tells Axios.
📍 Zoom in: Stack will demonstrate its proof of concept in Central Ohio.
- Today, it's working only with companies that have the "vast majority" of their staff here, with plans to grow and refine here before expanding.
Columbus is a good test market, but it's also a place where Frommeyer can "build this company in-person in downtown Columbus, where we're all together in the office" amid a business scene he knows well.
- He built his reputation at Beam Benefits, where he raised $170 million to grow the company, which was eventually acquired by Principal Financial Group.
- Much of the Stack team comes from Beam.
The big picture: Ohio startups have struggled to find funding lately as money shifts toward AI and the coasts.
- But Frommeyer says he's part of a mature wave of repeat founders and leaders who are back building their second and third companies with more experience, more connections, and a better ability to attract investment.
What they're saying: "Columbus startups are back," he tells Axios.
- "I'm very excited about this, and I've been talking about it a lot publicly recently, because I think there's something really exciting what's happening with founders and the startup talent market here."