Threeflow Raises $45M to Scale Employee Benefits Placement Software

ThreeFlow Secures $45 Million in Series B Funding

ThreeFlow, a software provider focused on empowering insurance brokers in the employee benefits sector, has announced the successful completion of a $45 million Series B funding round. This investment was spearheaded by new investor Accel, with participation from existing backers including Emergence Capital, Equal Ventures, and First Trust Capital Partners.

Company Growth and Funding History

Previously operating under the name WatchTower, the Chicago-based company initially raised $8 million in Series A funding in January 2021. This latest financing brings the total venture capital raised since its inception in 2015 to $53 million.

Significant expansion has occurred since the Series A round. The company’s headcount has increased from approximately 20 to 84 employees. Furthermore, four new executive positions were created to lead engineering, sales, marketing, and product development, as stated by CEO Ryan Sachtjen in a recent interview.

Future Plans and Investment Focus

The capital secured will be strategically allocated to double the employee base throughout 2022, concentrating on the aforementioned key functions. A primary focus will be on bolstering engineering capabilities to facilitate wider adoption of carrier integrations.

ThreeFlow also intends to unveil a comprehensive API strategy in the coming year, aimed at enhancing connectivity with insurance carriers. Sachtjen anticipates this initiative will be a substantial catalyst for future growth.

The Benefits Placement System

ThreeFlow’s core offering is a “benefits placement system,” a novel software category designed specifically for insurance brokerages. These brokerages consolidate plans from various insurance providers and offer them to businesses.

Over the past year, the platform has processed over $600 million in transactions, representing a doubling of volume compared to the previous year. This demonstrates significant market traction.

Market Reach and Expansion

Currently, the brokers utilizing ThreeFlow serve 7,600 employers and collaborate with 40 insurance carriers across 34 states. The company is committed to continuing its geographic expansion efforts.

The number of enterprise contracts has also seen substantial growth, increasing from 28 in January to over 100 currently.

Evolving Employee Benefits Landscape

While the traditional medical, dental, and vision insurance markets are well-established, companies are increasingly seeking to broaden their employee benefit packages. This includes incorporating plans for fertility treatments, mental health support, and financial wellness programs, creating new avenues for ThreeFlow to capitalize on.

Addressing Brokerage Needs

Insurance brokers require a high level of customization in their sales processes due to the intricate nature of designing plans tailored to diverse client needs. Historically, this demand has been met with outdated and largely manual systems, such as those based on Microsoft Office.

Key Tenets of the ThreeFlow Solution

According to Sachtjen, ThreeFlow’s solution is built upon three fundamental principles:

• It is specifically designed to address the unique requirements of insurance brokers.
• It provides comprehensive support for the entire placement process, from start to finish.
• It functions as a centralized system of record, facilitating seamless data sharing between insurance carriers and brokers.

Leveraging Data for Enhanced Decision-Making

ThreeFlow’s strong relationships with both brokers and carriers provide access to a wealth of data. The company intends to utilize this data to provide valuable insights.

“We aim to consolidate this information and deliver it to leadership on both the broker and carrier sides, enabling more informed decision-making at a strategic level,” Sachtjen explained. “Furthermore, we seek to improve collaboration between carriers and brokers, recognizing the interdependent nature of their relationship.”