We just got our first look at health insurance startup Clover Health's financials since it raised another $500 million

Lydia Ramsey

Mar 5, 2019, 22:33 IST

We just got our first look at health insurance startup Clover Health's financials since it raised another $500 million

Courtesy Clover Health

Clover Health CEO Vivek Garipalli

We just got a look at the 2018 financial results of Clover Health, an Alphabet-backed health insurance startup recently valued at $1.2 billion.
Clover lost $40.9 million in 2018, a deeper loss than the $22 million it posted in 2017, as the company plotted expansions into three more states.
The filings come shortly after Clover raised an additional $500 million in funding, bringing its total funding to $925 million.

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

Clover lost $40.9 million for the full year of 2018 in New Jersey, the company's main market, according to a state insurance filing reviewed by Business Insider. The losses were deeper than in 2017, when Clover posted $22 million in losses. The company, which is based in San Francisco, offers private health insurance plans for seniors, a product called Medicare Advantage.

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Clover sells Medicare Advantage health insurance plans. When seniors in the US turn 65, they can choose to be part of either traditional Medicare or Medicare Advantage, which is operated through private insurers like Clover. The hope for San Francisco-based Clover and other technology-based health insurers is to use data to improve patients' health.

"Tech alone can't crack the Medicare code," said John Gorman, the retired founder of healthcare consultancy Gorman Health Group. "It's really about getting doctors to do what you need them to do."

The insurer in 2018 operated in New Jersey, Pennsylvania, Texas, and Georgia, and is expanding into three more states for 2019: South Carolina, Arizona, and Tennessee. Business Insider reviewed 2018 filings from New Jersey, which makes up the vast majority of Clover's business. Filings from the other states weren't available.

Here are some other key figures:

Clover's revenue in New Jersey was $290 million in 2018. Clover told Bloomberg News in March 2018 that it expected revenue of about $330 million.
The company paid out $274.8 million in medical expenses for its customers over the year, or about 95% of the premium revenue it took in from its members.
Clover had 32,425 Medicare Advantage members by the end of 2018, up from 27,752 the year before.
As of February 2019, Clover plans have enrolled 39,341 individuals, the majority of which are in New Jersey, according to federal data.

A spokesman for Clover declined to comment on the health insurer's financial results.

A growing, competitive market

In January, Clover raised an additional $500 million in a round led by Greenoaks Capital, bringing its total funding to $925 million. The company was valued at $1.2 billion before the latest funding round, according to PitchBook.

"This new round of funding isn't just a strong vote of confidence in Clover Health," CEO Vivek Garipalli wrote in a blog post announcing the funding. "It also demonstrates our commitment to New Jersey residents and the innovation economy in the Garden State."

Clover's funding comes 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 the course of 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 now mainly sells insurance on the individual exchanges set up by the Affordable Care Act, and 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.

Bright Health, a Minneapolis-based startup that provides individual and Medicare Advantage plans, in November raised $200 million as it expands into additional markets around the US.

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