Author: Assaf Mischari, Managing Partner at Team8 Health

There’s a new addition to the Team8 portfolio, and one we’re particularly excited about. Today, we are announcing our $8.3M Seed investment in Fijoya – a startup launched in the Team8 Digital Health Foundry, co-founded by serial entrepreneurs Baruch Levy and Sagi Polani. 

Fijoya combines fintech and AI-powered personalization to transform employer-sponsored healthcare in the United States. It operates at the intersection of many areas we care deeply about - enterprise software, digital healthcare, payments, and data. Let’s take a look at what they’ve set out to solve, and why we see this company as a perfect embodiment of Team8’s core expertise and investment thesis.

160 million Americans have a problem

Self-funded employee health plans (often referred to as ‘self-insured’) - where the employer provides health benefits directly to employees -  used to be limited to the largest corporations, but have become increasingly prevalent among businesses of all sizes and are currently estimated to be a $1.5 trillion industry. Over 160 million Americans are covered by employer-sponsored health insurance plans, and over two-thirds of these plans are self-funded. In recent years, this trend has coincided with the rise of healthcare point solutions, which are specialized offerings for issues such as smoking cessation, active lifestyle, fertility, mental health, nutrition, and dozens more categories across the broad spectrum of health and wellness.

Point solutions are a popular choice for employees looking for more flexible and diverse health services, and the convenience of digital access to healthcare (such as mobile applications and virtual-first treatments). For employers, a healthy workforce is more productive and costs businesses less in claims and sick days; broader coverage is also a way to differentiate and retain employees in a tight labor market. The result is a booming marketplace, with over 10,000 solutions currently available and a market estimated at $32 billion.  

There are advantages to having this rich ecosystem of vendors, but it also creates complexity that leads to underutilization. Current estimates are that employees use only 5-10% of the health benefits they are entitled to. There are multiple reasons:

• Administrative overhead for employers: Employers need to contract separately with each point solution vendor, which adds significant overhead and reduces the incentive to onboard new offerings. This leads to fewer solutions being contracted, which ultimately means employees are less likely to have access to the health services that they need.
• Information gaps: Employees often aren’t aware of what’s available or what could generate the best outcome for them, especially when it comes to more specialized solutions. Employers are not always successful at educating their workforce about what’s available in the company healthcare portal.
• Complex reimbursement processes: The need for employees to front costs using their own payment methods and then submit paperwork to get reimbursed after the fact hurts utilization. Employees are averse to tracking down receipts and filling out forms, and this friction counteracts one of the key potential benefits of point solutions - convenience and ease of access.

The result is significant underutilization - which in turn means that employees are not benefiting from the full healthcare coverage that employers have made available. This is both economically inefficient and – more importantly – can lead to suboptimal health outcomes for millions. 

An end-to-end solution for point solutions

Within this sprawling problem space, Fijoya has developed a unique platform. It combines different technologies and approaches to remove friction points for everyone involved - employers, employees, and point solution vendors.

On the employer side, Fijoya has established access via a single platform to thousands of health and wellness products and services, now accessible from a single application. This simplifies the administrative process as there is only one contract to manage - and also gives point solution vendors a way to get their offerings in front of more potential users easily.

On the employee side, Fijoya uses an AI-driven recommendation engine to match employees with the precise health services they need; it also removes the financial friction by enabling employees to pay using employer-funded virtual cards which are created on-demand, thereby eliminating the need for dealing with receipts or ad-hoc reimbursement.

This end-to-end, technology-driven offering removes unwanted overhead and inefficiencies for enterprises; and crucially, it does so while also broadening access to health services for employees, rather than offering more narrow choices. 

##A perfect fit for the Team8 model##

There are a lot of things we love about Fijoya, but here are the four big ones:

1. It’s big and impactful.

As Venture Creators, we’re looking for solutions to big problems. You don’t get much bigger than impacting health outcomes for over 160 million employees. In addition to potentially unlocking massive financial value, Fijoya can drive meaningful change in the world by increasing healthcare utilization for these employees and their families (who are often covered under the same self-funded plans). These are the kinds of investments that we want to make - in this case, by building and funding the company that tackles them.

2. Enterprise focus

Fijoya’s solution tackles the problem from the enterprise buyer’s perspective, which is where we like to operate. A core tenet of the Team8 model is our unparalleled network and deep expertise in enterprise software. The Team8 Village gives us direct access to enterprise buyers and industry leaders; combined with our network of hundreds of experienced operators and investors, we are the best choice for entrepreneurs who want to achieve effective go-to-market for enterprise software products.

3. The intersection of fintech and healthcare

A major part of our broader thesis around digital healthcare is the need to simplify the financial aspects of healthcare, which in many cases means rethinking payments infrastructure. Complex reimbursement processes, dealing with receipts, and aversion to recurring subscription fees are major detriments to digital healthcare adoption; Fijoya’s decision to incorporate an embedded payments solution is strongly aligned with our own for the future of this field.

4. The right team

Founders Baruch Levy (CEO) and Sagi Polani (CPO) have over 40 years of combined healthcare and entrepreneurial experience. They’ve launched successful health tech startups, worked at Fortune 500 companies, and successfully managed large-scale medical R&D. Having assembled a broader team with expertise and track record in healthcare, fintech and B2B2C companies, we are confident that this team has the right background and skills to meet their ambitious goals.

Towards better health outcomes

With Fijoya’s new Seed funding secured, we look forward to seeing the impact Fijoya will create.