Health insurance startup Clover Health just laid off 25% of its staff months after raising $500 million

Lydia Ramsey

Mar 27, 2019, 23:40 IST

Health insurance startup Clover Health just laid off 25% of its staff months after raising $500 million

Courtesy Clover Health

Clover Health CEO Vivek Garipalli

Clover Health on Wednesday told employees it's laying off 25% of its staff.
In a statement sent to Business Insider, Clover said that about 140 employees will be laid off as the healthcare startup goes through a restructuring.
In January, Clover raised an additional $500 million in a round led by Greenoaks Capital, bringing its total funding to $925 million.

Clover Health is laying off 25% of its staff.

In a statement sent to Business Insider, Clover, which offers health plans to seniors through the Medicare Advantage program, said that about 140 employees will be laid off as the healthcare startup goes through a restructuring. The news comes just months after Clover raised an additional $500 million in funding.

"As Clover enters this new era of growth, we are restructuring some teams in recognition of our need for deep Medicare Advantage skill sets to continue propelling us forward to fully achieve our mission of improving every life," Clover said in the statement. "To add increasing value to our members' lives and continue building a sustainable business, we need to ensure that our focus, the skills of our teams and our cost structure match our mission."

Clover said that the San Francisco-based company will be opening a new office in Nashville to tap into that talent pool that better fits the skill set the company's looking for. Nashville is known for its health IT and health insurance expertise, giving the company a different talent pool than what's in the tech-focused Bay Area.

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Clover's 2018 financials

The healthcare startup Clover Health deepened its net losses in 2018 as it worked to expand into more markets.

San Francisco-based Clover lost $40.9 million in 2018 in New Jersey, the company's main market, according to a state insurance filing reviewed by Business Insider. Clover posted $22 million in losses in 2017.

Clover's funding came on the heels of a massive fundraising year for insurance startups, particularly those operating in the Medicare Advantage space or those planning to enter the market. Four startups raised a combined $1.3 billion in five months.

In August, Oscar Health raised $375 million from Alphabet as it gears up to get into the Medicare Advantage market in 2020.

Oscar, which now mainly sells insurance on the individual exchanges set up by the Affordable Care Act, took in $1.2 billion in gross premium revenue in 2018. The company's financial losses narrowed to $57 million from $131 million in 2017, according to state financial filings, Business Insider reported last week.

Devoted Health in October raised $300 million ahead of launching its first Medicare Advantage plans in Florida this year. And Bright Health, a Minneapolis startup that provides individual and Medicare Advantage plans, in November raised $200 million as it expands into more US markets.

The startups are competing with big, entrenched insurers like Humana, UnitedHealth Group, and CVS Health.