PlanSource, a leading provider of cloud-based health exchange and benefits administration technology, has received a commitment for a minority equity investment of $70 million from Boston-based private equity firm Great Hill Partners. PlanSource expects to use the funds to drive growth in sales and marketing, invest in continued product innovation, and expand its operating and technology infrastructure.
“2015 has been a standout year for PlanSource,” said Dayne Williams, CEO of PlanSource. “The partnership with Great Hill and this infusion of capital will allow us to continue to fuel our growth and speed the delivery of technology that is helping thousands of families shop, enroll and manage insurance and other essential benefits coverage.”
With this investment, Chris Busby and Matthew Vettel from Great Hill Partners will join the PlanSource Board of Directors, which includes existing investors Lemhi Ventures and Timucuan Asset Management.William Blair & Company, LLC, acted as exclusive financial advisor to PlanSource.
Deep roots produce explosive growth
PlanSource was founded in 2008, but its roots stretch back to the 1990s and the birth of human resources software and cloud computing. The company built the first single-source multi-carrier web-enabled benefits management and billing platform. PlanSource has experienced explosive growth in recent years, buoyed by a clear market strategy and innovative products. As of June 2015, PlanSource has experienced:
- 82% year-over-year increase in recurring revenue
- 77% year-over-year growth in employees on the PlanSource Platform
- 97% customer retention rate
In addition to growth in key financial metrics and customer satisfaction, PlanSource has recently signed strategic partnership deals with leading insurance carriers, including MetLife and Humana. And while the majority of its growth has been organic, the company also expanded through its acquisition of ClearBenefits in March 2015. Additionally, PlanSource has had the privilege of powering the technology behind the state of Utah’s health insurance marketplace, Avenue H, which has become one of the most successful state health exchanges since the passing of the Affordable Care Act.
The benefits technology market has evolved rapidly in recent years. The Affordable Care Act has placed new reporting requirements on employers, and PlanSource has been quick to deliver tools that ensure compliance and simplify the reporting process. The company is driving trends in how benefits are bought and sold, working closely with some of the country’s largest brokers and insurance carriers. Its highly-configurable benefits administration system, which can be run by employers or set up as a private or public health exchange, allows consumers to shop for benefits in the same consumer-friendly way they shop for other products online.