This past April, Oscar raised $145 million at a $1.5 billion valuation in a bid to reimagine health insurance. Today, the company has announced it has raised a much smaller additional $32.5m of capital from Google at a valuation of $1.75b. The company is still losing money, which is not totally unexpected given the high amount of upfront capital and requirements to meet when starting a brand new insurance carrier. But the diminutive round still begs the question, was the raise really just to provide affirmation of an upward valuation for Oscar?
Some of Oscar's funding — which now totals more than $300 million — is covering its losses, the Journal reports. Last year its losses totaled $27.5 million, according to an estimate Oscar gave to New York's insurance regulator. Its revenue in 2014 was $56.9 million, according to the same filing. Founded in 2013 by entrepreneur and venture capitalist Joshua Kushner, Microsoft's former director of health care Kevin Nazemi, and former McKinsey & Company computer scientist Mario Schlosser, Oscar rivals established health insurance companies like Aetna and UnitedHealth.