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Exclusive: Palantir alums raise $50M for Medicare navigator Chapter

Illustration of an elderly person holding a phone on which the screen is made of a $100 bill.

Illustration: Gabriella Turrisi/Axios

Medicare navigation company Chapter collected a $50 million Series C led by XYZ Venture Capital, CEO Cobi Blumenfeld-Gantz tells Axios exclusively.

Why it matters: More than half of Medicare beneficiaries fail to assess their coverage options each year, per a recent Kaiser Family Foundation analysis.

Zoom in: Existing investors Addition, Narya Capital, Susa Ventures and Maverick Ventures participated.

  • Blumenfeld-Gantz declined to say when he foresees Chapter raising a Series D.

How it works: Chapter assesses every available Medicare option, even when it doesn't get paid by that plan (for example, a small regional carrier that doesn't work with brokers). It pays its Medicare advisers regardless of whether customers enroll in a plan that gives Chapter a broker's cut.

  • The company ingests data on plans, doctors and prescriptions to make individualized plan recommendations, and a Chapter adviser explains the strengths and weaknesses of the options.
  • Chapter automates some parts of the enrollment process and tracks customers' applications as they move through it. Once a customer is approved for a plan, they can follow up with Chapter with questions about bills, denials, or new care needs.
  • All of Chapter's advisers are full-time employees, "and I personally interview every one of them," says Blumenfeld-Gantz.

Driving the news: The expansion of benefits markets and the introduction of new regulatory requirements have boosted the appeal of navigation services, which promise to sort through the noise.

  • The Centers for Medicare and Medicaid Services (CMS) recently moved to prohibit brokers from selling consumer data to multiple buyers — something Blumenfeld-Gantz calls a "welcome change" from a practice that benefited Chapter's competitors while disadvantaging seniors.

Flashback: XYZ managing partner Ross Fubini met then-Palantir employees Blumenfeld-Gantz and Corey Metzman (Chapter's co-founder and COO) through a fellow Palantir alumnus in 2020.

  • After watching his parents struggle through Medicare enrollment, Blumenfeld-Gantz decided to start Chapter with a Palantir-like, data-first approach.

What they're saying: "We are transparent in who we're contacting and who we are, and we'll never sell that data to others," says Blumenfeld-Gantz.

  • "Mom-and-pop brokers," — Chapter's competition, per Blumenfeld-Gantz — "tend to be well-trusted even if they don't have the data or technology to provide good recommendations. I liken it to: Would you trust Google Maps or the gas station attendant for directions?"
  • "10 years ago it might have been the attendant, but we're now in the phase where you need good data and solid technology to do this," he adds.
  • Chapter is "doing a great job at understanding, for example, my mom's life — her drug costs, her provider costs," says XYZ's Fubini, adding, "The product is uniquely good at that."

The big picture: Insurance- and benefits navigators have attracted venture interest amid increasing competition in Medicaid and Medicare Advantage markets, with at least five companies raising significant early and mid-stage financing rounds between summer 2022 and summer 2023.

State of play: Such companies were all the rage last year. For example:

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