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BFD Expert Voices - Private Credit

BFD Expert Voices

Venteur Health Insurance, which offers a service for employees to find more personalized health care plans, raised $7.6 million in seed funding, the company tells Lucinda exclusively.

Why it matters: The Affordable Care Act prompted an explosion of health care startups, and now a Trump-era insurance rule — one that may have expanded the ACA's reach — is giving rise to another set of companies.

How it works: Founded in 2021, Berkeley, California-based marketplace Venteur Health Insurance gives employees more insurance plans than what employers typically offer.

Venteur helps employees choose Individual Coverage Healthcare Reimbursement Arrangement (ICHRA) plans based on demographic and health data. It also helps the company personalize these plans.

Employers then pay Venteur a subscription fee for each employee that opts in to a plan on its marketplace. 

Under group insurance plans, when companies change health care offerings, workers often must find new doctors and prescriptions, says CEO Stacy Edgar. A broader marketplace gives employees the ability, in theory, to maintain their existing providers and medications.

Context: Its business is based on the ICHRA, which came into effect in 2020 following a Trump administration rule.

ICHRAs allow employers to set aside a certain amount of money for each employee to buy their own insurance and to pay for other health costs via HRAs. Typically, ICHRA plans are offered as an alternative to group insurance.

Such plans give employers a better sense of their overall benefits budget, as well as offering employees coverage alternatives beyond the typical handful available through group insurance.

Details: GSR led the round and was joined by Headwater VC, Revelry Venture Partners, Houghton Street Ventures, Plug and Play, Techstars and CRCM Ventures.

What they're saying: "I think ICHRA will be the dominant option in the next five years," Edgar says, noting that a pension used to be the dominant retirement savings mechanism, but companies now prefer 401(k)s.

State of play: A handful of startups have launched since ICHRA's creation, offering to build personalization around it.

Kansas City-based Benefitbay, which focuses on ICHRA administration, raised $2.5 million in April.

TakeCommand Health raised $12 million in 2021.

Thatch, which recently raised $6 million, focuses on startups and pitches itself as a way for employers to create more curated benefits options.

1 big thing: Funding a Trump-era Obamacare rule

Turkish fintech Param is looking to expand its European operations with the acquisition of Twisto, a Czech buy now, pay later provider, from Zip Co, Ryan writes.

Why it's the BFD: The deal highlights the diverging fortunes of BNPL providers, as Param seeks to expand while Melbourne-based Zip Co slims down.

What's happening: The deal gives Param the licenses it needs to expand into Europe while enhancing the product suite Twisto can offer existing clients.

Initially, it will gain access to Twisto's core Czech Republic and Poland markets, with plans to expand into countries such as Germany and the Netherlands in coming months.

Context: Ankara-based Param offers online and offline payment solutions, customer loyalty programs, prepaid cards and other fintech services to corporate, e-commerce and SME clients in Turkey.

It also has U.K. operations and is licensed as an electronic money institution (EMI) by the Financial Conduct Authority (FCA) there.

The firm was most recently valued at more than $200 million after raising funds from European Bank for Reconstruction and Development (EBRD), CEECAT Capital, Alpha Associates and Revo Capital in June 2022.

The other side: At the same time that Param seeks to expand its addressable market, ASX-listed BNPL provider Zip Co has been shedding assets in an effort to reach profitability.

Zip Co announced plans to acquire Twisto for A$160 million in early 2021, with the deal closing that November.

Though terms of the Param deal were not disclosed, Zip had previously said it expected net cash inflows of A$20 million related to its divestiture of Twisto and its South Africa-based Payflex business.

2. The BFD: Param's BNPL buy

💰 3AC Founders' OPNX fined $2.7m by Dubai crypto regulator (CoinDesk)

The crypto bankruptcy exchange was fined by Dubai's Virtual Assets Regulatory Authority on May 2. The exchange had yet to pay as of yesterday.

🔎 Visa's pricing of token technology under DOJ probe (Bloomberg)

The department is examining how Visa charges merchants for tech that protects cardholder information.

📉 Adyen's revenue hit by hiring spree and competition (PYMNTs)

The payments giant says competition from companies like PayPal and hiring costs have slowed its revenue growth. Shares of the company fell 27% in Amsterdam.

"In some areas, the business grew at a lower rate than anticipated. This was the case for our North American net revenue," the company's shareholder letter read.

🛑 PayPal halts crypto sales in U.K. until 2024 (Reuters)

Starting in October, PayPal says it will pause crypto buying for U.K. customers to comply with new rules on crypto promotions.

3. Credit score

Illustration of a tape measure with "Credit Score" written on the side.

Looking for more deal insights? Search the Axios Pro Deals Tracker beta.

• CityPay.io, a Georgian businesss cryptocurrency payments firm, raised €2m. Investors include Tether and Presto Ventures. https://axios.link/44ddFHZ

• Vegapay, an Indian digital lending and card management platform, raised $1.1m in pre-seed funding. Investors include Eximius Ventures, DSP HMK, Capri Global, Upsparks Capital, MGA Ventures and Climber Capital. https://axios.link/45yW2n6

• Navacord, a Toronto-based commercial brokerage owned by Madison Dearborn Partners, agreed to buy Condominium Insurance Solutions. https://axios.link/47xGCRT

• Mirae Asset Global Investments acquired a 53% stake in Stockspot, an Australian robo-adviser, for A$28m. https://axios.link/45edgX8

• Securitize acquired Onramp Invest, a San Diego-based digital asset wealth platform for RIAs backed by Galaxy Digital, Coinbase Ventures, and Fintop Capital. securitize.io

4. Deals!

• Pedro Arnt has joined Uruguay-based payments firm DLocal as co-CEO. He previously served as EVP and CFO at Mercado Libre. https://axios.link/45dTjQb

5. It's personnel

Situational awareness: All eyes are on Discover today. The company is hosting an investors meeting just days after CEO Roger Hochschild resigned amid significant compliance issues.

🥔 @Lucinda has become known among acquaintances for drawing a potato.

🐶 @Ryan is trying out a new doggy day care.

Thanks to George Moriarty and Rob Reinalda for today's edits.

And thanks to you for reading. Please tell your fintech friends about this newsletter. They can sign up here.

August 17, 2023

1 big thing: Funding a Trump-era Obamacare rule