Alex Cyriac remembers his mother, who stopped taking medication because she did not have enough money for co-payment. His friend, Shobin Uralil, and his wife had similar medical issues with their first baby.
It was this kind of connection around personal experiences associated with health care costs that got Cyriac and Uralil thinking. They recognized health savings accounts as a powerful utility for saving on health care costs, but believed that the way they were managed – largely by the banks offering the service after the fact, according to Cyriac – did not. not put the consumer first.
“We saw an opportunity to approach it differently and put the consumer first,” he added.
CEO Cyriac and Uralil launched Lively in 2016 to be a modern version of the HSA for employers and individuals. Their early decision to build their own record-keeping technology stack means the company can make its products free for individuals, who can set up recurring or one-off transactions and also don’t have to fill out forms for every claim.
Dynamic investments. Image credits: Living
Today, the San Francisco-based company announced an $ 80 million Series C led by B Capital Group, which included Telstra Ventures and existing investor Costanoa Ventures. The latest round of funding brings Lively’s total funding to over $ 120 million.
The new funding allows the company to create more tools for consumers, grow its team and extend its offerings to financial institutions and employers. Lively started direct to the consumer and is now moving into business-to-business.
Over the past 18-24 months, it has developed this goal and has seen its users double last year and then more than double this year, Cyriac said. This year, Lively partnered with BMO Harris to be the HSA provider to its members.
Market research firm Devenir showed that in 2020, HSA assets were estimated at $ 77.8 billion held in more than 30 million accounts, a figure that has doubled in the past three years. Likewise, the adoption of HSA has propelled Lively to $ 500 million in assets under management, Cyriac added. This is after doubling his AUM every 11 months for the past few years. It expects to surpass $ 1 billion in assets by early 2022, which it says will make the company the fastest HSA provider to reach that milestone.
With costs rising year on year, there are fewer savings options for long-term health care, and to open and fund an HSA, an individual must purchase a high-deductible health plan. Uralil says the average deductible on all health plans is now higher – nearly $ 5,000 a year – than the Internal Revenue Service’s definition of a high deductible health plan.
“It’s a function of what’s going on in healthcare, consumer-driven health, with more people responsible for the financial aspects of healthcare,” Cyriac said. “Every year more and more people are eligible for HSA due to rising costs and rapid adoption of healthcare plans. Lively provides tools to make more informed decisions about how to spend that money. “