Austin Insurance Startup Raises $10,000,000

Austin-based health insurance startup Decent has raised $10 million as it looks to expand statewide.

By Kara Carlson

Sep 9, 2020 at 6:31 PM

Austin-based health insurance startup Decent has raised $10 million as it looks to expand statewide.

The funding round was led by QED Investors, along with more than 10 other investors. Decent has now raised about $18 million since its inception.

Founded in 2018 by CEO Nick Soman, Decent initially offered health insurance plans for self-employed professionals. With the new funding, it plans to expand its offerings to small businesses, with a focus on the technology sector. Decent currently has about 30 employees, and expects to add to that headcount, Soman said.

The funding will also let the company expand throughout Texas and expand its offerings to small businesses, primarily in the technology industry. The company, which partners with the Texas Freelance Association, will work with Texas self-employed professionals and businesses that employ between two and 100 employees.

Rather than work through third-party insurance company, the company uses self-insurance to band small businesses and entrepreneurs together to reduce costs.

Self-insurance is when a business or self-employed person takes on the costs and risks of paying for health care. Traditional insurance plans require a regular premium paid to an insurer, with the insurer then responsible for paying for health care services. With self-insurance, a business or self-employed person sets up a special trust fund that earmarks money to pay incurred claims, and often backed by reinsurance, which kicks in if claims are higher than expected.

Soman said the plans offered by Decent can save people up to 40% compared to market rates for individual insurance policies. The company offers a range of health care plans and works with independent direct primary care doctors and partners including AXA, HCA Healthcare, Medlion, Hint, and Costco Health Solutions.

Soman said he came up with the idea after feeling the pain of insurance costs and during his career as an entrepreneur.

“I was paying more for health insurance than for rent for my family of four in California, and got obsessed with why it’s so expensive for small businesses or independents,” Soman said. “I realized that there was an opportunity to do something that 90% of the big companies were doing and find a way to bring that to little guys.”

Soman said Decent’s health insurance plans are built around free virtual primary care. Patients see the same doctor every time, and can be referred for in person services if needed. He said the idea is to reduce barriers and costs for care, which will make people see their doctor more often and stay healthier in the long term.

“If you are a little sick, we want you to talk to your doctor, and it’ll keep you healthy in the long run,” Soman said. “So we have really tried to remove all barriers to you being able to easily do that.”

Soman said virtual care options have grown in popularity amid the coronavirus pandemic.

He said Decent’s virtual visit feature is also helpful as the company expands to more rural areas in Texas which can be more limited in their health care options.

“We can serve people who are in all parts of Texas. They don’t just have to be in the city near a doctor,” Soman said.