- Yuzu Health just raised seed funding from Lachy Groom, Neo, and Day One Ventures.
- The healthtech startup uses AI to offer self-funded health plans to startups and small businesses.
- Check out the 15-slide presentation Yuzu Health used to raise $5 million.
Big tech firms and other large companies are known for offering generous perks such as free food, travel stipends, and top-of-the-line healthcare coverage — the latter of which is often made possible via self-funded plans, in which employers collect premiums from their employees and then pay out claims.
Yuzu Health is working to bring that system to the world of startups. The company, which uses AI to administer self-funded healthcare plans for small companies, just raised $5 million in seed funding led by Lachy Groom with participation from Neo, Day One Ventures, Altman Capital, WndrCo, and Browder Capital. Unicorn founders and operators from startups including OpenAI, Stripe, Coalition, Brex, Notion, Deel, Mercury, Lattice, and Vanta also participated in the round.
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Big companies use self-funding to customize the benefits they offer and pass along higher-quality care and lower costs to employees. But for startups and other small businesses, self-funding is difficult because it’s hard to predict how much to charge in premium costs. The process traditionally requires a third-party administrator to manually manage claims and payout, which, for insurers, isn’t cost-effective when working with a small company.
That’s where New York-based Yuzu Health comes in. It’s using machine learning to automate claims and payment processing to make self-funding a viable option for startups.
Max Kauderer, Yuzu Health’s CEO who cofounded the startup alongside Russell Pekala and Ryan Lee, told Insider in an interview that when the trio initially set out to build something in the healthcare space, their own experience trying to secure good health insurance was the inspiration for making self-funded plans an option for small companies.
“We set out to get insurance for ourselves. It was cumbersome and expensive, and from investors and other founders we spoke with, no one had a great answer,” he said.
Kauderer added that many of the people he initially spoke with about the issue eventually became investors in the startup because they also dealt with the pain points of trying to offer employees a good insurance plan. Yuzu Health currently powers 10 healthcare plans for thousands of members, he said.
“Building this tech layer is changing the paradigm and reducing costs,” Kauderer said. “Broadly, we’re excited about being modular and, as a new player in the space, unlocking startups’ abilities to get self-funded plans.”
Yuzu Health joins a growing ecosystem of startups that are helping other startups operate and provide better perks and conditions for their employees. The space also includes startups like Rippling, an HR and IT administrator, that raised a $500 million Series E financing this spring, and Vouch, the startup insurance provider that’s raised $160 million.
Check out the 15-slide pitch deck Yuzu Health used to land $5 million in seed funding:
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