Google invests $32.5M in Oscar: 9 things to know about the startup insurer

Oscar Health, the young health insurance startup company based in New York, is growing up fast. Google Capital, Google's growth equity fund, has invested $32.5 million in the company, according to The Wall Street Journal

Here are nine things to know about this burgeoning company.

1. Two-year-old Oscar is now valued at $1.75 billion, up from a prior valuation of $1.5 billion when it last received funding in April, according to the report.

2. Oscar Health is lauded as a disrupter among its more traditional contemporaries. Its eccentric name, cheeky cartoon branding and promise to simplify health insurance targets a young, digitally savvy market. "The causal, personal tone of Oscar's messaging stands in stark contrast to faceless, corporate sensibility of traditional health insurance companies," Fortune wrote in April.

3. The company differentiates itself from other insurance providers as a predominantly web-based business, a nod toward the digitally-connected millennial generation. According to Wired, Oscar CEO Mario Schlosser said it is this holistic approach to technology that lends Oscar a competitive advantage. "Just fixing the user experience won't be enough. We went to great lengths to create an incredibly close relationship between our technology and physicians," he told Wired. 

5. David Lawee, the head of Google capital, said Google chose Oscar to invest in over other startups because it has the potential to help reduce hospital bills and other costs for consumers. "What we're most excited about is companies that can transform the cost curve through technology," Mr. Lawee told WSJ. "Oscar is very well positioned to do that."

6. The company has amassed more than $350 million in its bid to use data and technology to make the insurance business work more like an Internet service, according to WSJ. For instance, it is a major proponent of telemedicine.

7. More than 40,000 people in New York and New Jersey have already signed up for Oscar insurance plans. While Oscar is only available to residents of those two states so far, it plans to open its service to people in California and Texas at the beginning of 2016. The average customer pays $5,000 per year for an Oscar health plan.

8. Oscar customers enroll in health plans through the online exchanges created by the Affordable Care Act. The company focuses on signing up individuals over employers, unlike most large insurance providers. This is challenging because it means Oscar will have to prove it can offer prices that can compete with established insurance companies, Gary Klaxton, vice president at the Kaiser Family Foundation, told WSJ.

"You can generally get better discounts [from healthcare providers] if you have a lot of enrollment, and if you're new you don't have a lot of enrollment," Mr. Klaxton said, according to the report. "That might mean you have to sustain some losses while you try to build enough market share."

9. Oscar lost up to $27.5 million on 2014 revenue of $56.9 million, the company told New York's insurance regulator. Mr. Schlosser attributed those losses to the company's investment in building new technologies.

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