Catch Raises $12M to Offer Independent Benefits

Catch Secures $12 Million to Expand Benefits for Gig Workers

Catch is dedicated to ensuring that all independent workers have access to essential health and retirement benefits.

The company, currently relocating its headquarters to New York City, directly provides health insurance, retirement savings plans, and tax withholding services to freelancers, contractors, and others who lack traditional employer-sponsored coverage.

Series A Funding and Growth

A new funding round of $12 million in Series A funding, spearheaded by Crosslink and including participation from Khosla Ventures, NYCA Partners, Kindred Ventures, and Urban Innovation Fund, will fuel further distribution partnerships and support the company’s move from Boston.

Founded in 2019 by Kristen Anderson and Andrew Ambrosino, Catch has now raised a total of $18.1 million in funding, including a prior $6.1 million raise.

Navigating Regulatory Approvals

The Catch team, comprised of 15 individuals, spent nearly two years securing approvals to market its platform across 38 states via the federal marketplace. Anderson highlights that only eight companies have achieved this, with Catch being one of just three authorized to sell benefits directly to consumers.

“A growing number of companies are reducing healthcare offerings, coinciding with an increase in individuals joining the creator and gig economies,” Anderson explained to TechCrunch. “This shift means fewer people are relying on the traditional employer-led benefits model.”

Customer Needs and Pandemic Impact

The average Catch customer is 32 years old. Beyond existing services, customers expressed a need for assistance in managing their finances, including setting aside funds for taxes, retirement, and medical leave without requiring manual savings.

The onset of the global pandemic significantly impacted Catch’s customer base, with overall income declining by 40% across various industries. Some workers, such as hairstylists and cooks, experienced a complete loss of income.

Strategic Partnerships and Expansion

In response, Anderson and Ambrosino focused on developing distribution partnerships with platforms, business facilitation tools, gig marketplaces, and payroll companies interested in offering Catch’s services. The new funding will be used to expand the team supporting these partnerships and pursue additional collaborations, Anderson stated.

A Comprehensive Platform Approach

While numerous startups offer insurance products, many specialize in a single area, such as Starship’s focus on health savings accounts. Catch differentiates itself by providing a comprehensive platform experience with in-depth process support.

Anderson compares Catch to Gusto, a provider of cloud-based payroll, benefits, and HR management, emphasizing that Catch delivers an end-to-end solution tailored to the individual.

User Growth and Increased Savings

Over the past year, Catch’s user base has tripled, driven by the rise in individuals taking on second jobs and a partnership with DoorDash. Users are also maintaining balances five times higher than usual, reflecting increased goal setting and a greater need for savings.

Investments in retirement and health insurance have also seen substantial growth.

Future Plans and Product Development

Anderson anticipates a Series B funding round in a couple of years. The company is exploring the development of its own Health Savings Account (HSA) product, as well as disability insurance and other offerings to further distinguish itself from competitors like Spot, Super.mx, and Even, all of whom recently secured venture capital for benefits provision.

Addressing Market Challenges

Catch also aims to expand its reach beyond the federal marketplace. The co-founders are addressing concerns about potentially misleading benefit offerings, noting the existence of companies offering rates that appear too good to be true, only to reveal limitations in coverage upon closer inspection.

“We are focused on ensuring transparency and clarity,” Anderson added. “Younger individuals, in particular, need to fully understand the details of their coverage, as cheaper options may come with hidden restrictions.”