Maxwell Health gets an additional $ 22 million to streamline its health benefits

Xconomy Boston –

Veer Gidwaney admits he and his brother were probably “a little naive” about the complexity of the healthcare industry when they started out Maxwell Health in 2012.

Their startup provides web-based software for purchasing and managing health insurance plans and other benefits, and also operates an online marketplace for other human resources and health services. The goal: to update the HR processes that for many small and medium-sized businesses remain stuck in the 20th century (think paper or outdated software) and make it easier to manage benefits like using Netflix, says Gidwaney .

There is a lot of pent-up demand for such technology. But it is also a difficult and competitive sector to penetrate.

“There’s a pretty big down payment to pay to build viable technology in this space,” Gidwaney says. “It’s not trivial to build the technology… to integrate with all the players you need to integrate with. It takes time; you need capital.

Access to capital was not a problem for Maxwell, and today the money has continued to flow into the company’s coffers. Maxwell just closed a $ 22 million Series C funding round, just over a year ago raised $ 26.4 million from investors. The company’s total venture capital volume now stands at $ 56.4 million, Gidwaney says.

At this point, Gidwaney thinks Maxwell has reached a sweet spot where he’s still ‘quick and nimble’ as a small tech startup, but he’s grown to a size that allows him to be more efficient, especially in a well-established industry. like HR services. Maxwell, which has main offices in Boston and New York City, employs approximately 150 people nationwide. That’s more than double the size of its staff at the end of 2014, when we covered its B Series.

In this sector, “the expectations are so high that you have to be able to reach a particular scale, to which we have reached”, explains Gidwaney. “It helps us gain a seat at the table. We have it now, and as a result, we are able, I think, to do some really cool things. “

Hundreds of thousands of workers use the company’s software, Gidwaney says. Its reach is facilitated by partnerships with a growing number of insurers, brokerage firms and employee benefits advisors. These partners provide Maxwell products and services to businesses and their employees free of charge as part of their benefits. Maxwell makes money through monthly software as a service agreements with its partners, as well as a reduction in vendors and operators when their products are sold in Maxwell’s online marketplace.

by Maxwell the products include a mobile app that workers can use to find all the information they would need to, for example, visit a doctor’s office (like a virtual insurance card), or to discover and show a pharmacist which drugs are covered by their policy.

The company also offers a “concierge service” of on-demand online personal advisors, such as registered nurses. When purchasing insurance, they help employees choose between plans, then find doctors, schedule appointments or, if necessary, check for billing errors. Maxwell also offers a rewards-based program that streams activity from fitness devices like Fitbit to award members points for their healthy lifestyles. Companies like Cachable (online loans) and ID watchdog (Identity Theft Protection) offer their services through the Maxwell Online Marketplace.

The company added more products and services in the last year, such as retirement planning tools by MassMutual.

The new money is expected to help Maxwell bring its products to more people, as the company aims to serve 10 million people by 2020, Gidwaney said. He knows Maxwell has a long way to go, but he says he thinks he is on the verge of accelerating the adoption of his products. “The focus of our business right now is how we operate effectively and efficiently,” he adds.

Gidwaney declined to share specific hiring projections, but it looks like serving many more clients won’t require continuing the rapid pace of hiring from last year. “We can develop our team very well, but what concerns me much more is how to create a giant of a business designed to last,” he says.

Neither Gidwaney would share the revenue figures nor whether Maxwell is profitable. “But what I can tell you is that we have the opportunity to invest upstream of the trend in order to accelerate and build faster than if we were purely in organic growth. So that’s what we do.

Maxwell says the latest investments come from new investors GIS Strategic Ventures, an investment arm of The Guardian Life Insurance Company of America; Sun Life Financial; and Cendana Capital. Previous funders have also contributed including Adams Street Partners, Cambia Health Solutions, Catalyst Health Ventures, Industry Ventures, Lerer Hippeau Ventures, Schooner Capital, Tribeca Venture Partners, and Vaizra Investments.