Google’s parent company, Alphabet, is investing $375 million in health insurance startup Oscar just months after Oscar raised a separate $165 million cash injection. The new round leaves Oscar at a rough $3 billion valuation, per Wired.
Oscar will use the money on technology and to expand into Medicare Advantage, which the company previewed with a job posting last year. But entering a new line of health insurance likely means losses will continue for the foreseeable future.
By the numbers: Oscar sells health plans in the Affordable Care Act marketplaces and for small employers. So far, the company has lost a lot of money:
- Net losses of $127 million in 2017 and $205 million in 2016
- Revenue of $229 million in 2017 and $426 million in 2016
Oscar is also relatively young and expects to lose money in the early years. However, due to state capital requirements, health insurers have to have enough cash on hand to cover expected medical claims, so Oscar can’t continue to bleed money.
