Maxwell Raises $2M, Rolls Out User-Friendly Health Insurance Service
It’s the time of year that makes employees’ skin crawl—the moment you know you have to re-enroll for health insurance. A clunky, time-consuming, headache-inducing search between various plans ensues. Maxwell Health is trying to make it easier—and reward you for staying healthy to boot.
Maxwell, a startup based in Cambridge, MA, and New York City, displayed its plan to do so at New York Tech Meetup’s latest gathering at New York University’s Skirball Center for the Performing Arts in Manhattan. The startup, co-founded in November by brothers Veer and Vinay Gidwaney and launched in February, has created a user-friendly system designed to drive down healthcare costs by incentivizing healthiness and helping employees and small businesses set up and manage their health plans, benefits, and payroll, at no cost.
The company closed $2 million in Series A financing earlier this week in a round led by Tribeca Venture Partners and including Lerer Ventures, Vaizra Investments, BoxGroup, TiE Angels, and other undisclosed Boston and New York-based investors.
Maxwell is specifically targeting small to midsize businesses, a market Veer Gidwaney, the company’s CEO, calls “basically unserved, or not served well.”
“Small businesses in America are going to find it harder and harder to succeed because the cost of healthcare continues to go up—that’s a gigantic American problem,” he says. “But as you look into it, you start to realize there’s a lot of complexity and a lot of moving parts. So the trick for us is to try to put all of that plumbing together, and make the experience for the company very simple, and for their employees more simple.”
Maxwell aims to do this by automating and simplifying as much of the process as possible. It has created a Web-based platform that helps customers see the tangible difference between potential health plans—showing, for example, how much one would pay per paycheck for each option—instantly enroll online, and then manage all of their benefits, including 401(k) plans and transit benefits, thereafter. It also has an app that maintains all your insurance information in one place. Maxwell is integrating the public healthcare exchanges being set up as part of the Affordable Care Act into its service, according to chief product officer Vinay Gidwaney (pictured above).
“We’ve taken what’s been pretty normal to expect for a Fortune 5000 company, and brought it down to a small company and made it easy to use,” Veer says. “We want to be a single solution for a company to solve the entire problem.”
While other startups such as Zenefits and Simplee are built on similar ideas, Maxwell has two perks that it believes help it stand out. First, it offers a so-called “concierge service,” which is a staff of personal online advisors that can help employees make benefits decisions or instantly look into potential billing errors. Vinay, for example, showed how an employee could snap a picture of a bill and instantly send it in to a concierge who would then call the hospital, doctor’s office, and insurance company, and look into the problem. These concierges can also help with doctor recommendations, cost comparisons, and prescription drug support.
Second, Maxwell provides a rewards-based program that awards points to members for living healthy lifestyles. These points are tracked through an app Maxwell has built that streams in activity from fitness devices like the Jawbone Up or Fitbit Flex bracelets. By linking the device with its app, Maxwell awards points for things such as calories burned that can be traded in for gift cards with retailers like Amazon or iTunes. Maxwell’s vision is to make overall healthiness result in lower healthcare and insurance costs, Vinay said during the company’s presentation.
“There are other models out there, and that’s good—there’s a lot of innovation to be done, and there’s millions of businesses to be served, and no matter how ambitious we might be, we’re not going to touch millions of businesses anytime soon,” Veer says. “We’re trying to be ahead of the curve and set the standard.”
Maxwell doesn’t charge employers for its service. Rather, it generates revenue via commissions from insurance carriers that are traditionally handed to healthcare brokers when customers choose a plan. Those numbers have been growing at 50 percent per month so far, according to Veer. The company currently has about 11 employees, and while it isn’t scaling up its force significantly, it is looking to add a few salespeople and developers to its team, he says.
Maxwell is using the $2 million round to build out its service, add more products, and expand across the country.
“We’re currently in 25 states, we’ll go national pretty soon, and we want to bring on as many customers as we can,” he says.