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Exclusive: Soda Health raises $25M to simplify benefits

Erin Brodwin
Sep 13, 2022
Illustration of a credit card shaped like a health plus.
Illustration: Gabriella Turrisi/Axios

Benefits-matching startup Soda Health raised $25 million in Series A funding, CEO Robby Knight tells Axios exclusively.

Why it matters: Medicare Advantage is an increasingly competitive market, with plans amplifying supplemental benefits to edge out would-be rivals.

  • Add that to recent pushes by the Centers for Medicare and Medicaid Services (CMS) to invest more in health equity and "we continue to see more and more investment in the space," says A2 Strategy Corp. health care analyst Ari Gottlieb.

Details: Lightspeed Venture Partners, Define Ventures and Qiming Ventures participated in the round.

  • Soda is headquartered in Bentonville, Arkansas, with offices in Chicago.

How it works: Knight, the former head of consumer health innovation at Walmart, says Soda straddles retail, finance and health care in an effort to simplify using supplemental benefits.

  • Such benefits are often difficult to locate — not to mention use — and typically arrive in a combination of mail-order, online and in-person formats.
  • "This stuff is 30 years old," Knight tells Axios. "Humans deserve a solution that’s as dynamic as their needs are."

Yes, and: Soda matches people with what Knight calls "personalized" benefits, then provides them with a single prepaid debit card to use at participating retailers.

  • The company is currently focused on the Medicare Advantage and Medicaid markets, where it faces fewer rival startups, but also has an expanding presence in the employer sector.
  • "As we see people and track how they’re doing and what their needs and challenges and barriers to health are, we can identify the right thing to do next," says Knight.
  • He declined to provide specifics on the metrics the company tracks or its methods to match people to benefits.

Context: Insurance- and benefits-navigation platforms are attracting fresh interest from venture capitalists as their buzzier cousins — like primary care — rapidly modernize. For example:

What's next: Knight says the company is on track to serve half a million people in the next 12 months.

  • Soda aims to build up its presence in the employer sector and offer its services to nonprofits next.

What they're saying: Given the aggressive competition taking place in Medicare Advantage, Soda could hit the ground running, says Greg Chittim, a health care analyst with the firm Health Advances.

  • "Companies like Soda Health will find both partnership and competition from traditional healthcare navigators like VirginPulse and Accolade, broad-based chonic care companies like Welldoc and Transcarent, and innovative virtual care providers like CirrusMD, 98point6 and Firefly Health," Chittim says.

Yes, but: While somewhat unique, Soda's positioning as a member advocate could present monetization difficulties outside of plan sales, Gottlieb says.

  • "Their challenge will be finding a path that creates real value for more than just members," he adds.

🥤One fun thing: Soda got its name from the phonetic pronunciation of SDOH, the social determinants of health.

The takeaway: If successful, Soda could help streamline yet another fragmented subsector of the health care market.

  • "All the pieces are there but they’re not connected, and that’s what Soda does," says Lightspeed Venture Partners senior advisor Ling Wong.
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