PlanSource Raises $70 Million to Fuel Innovation in Benefits TechnologyPlanSource Release
Series C investment by Great Hill Partners will propel growth in sales, marketing and infrastructure
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.
A history of backing successful technology firms
Since its inception, Great Hill Partners has focused on partnering with rapidly-growing middle-market companies. In March 2014, Great Hill Partners invested in bswift, a provider of SaaS-based benefits technology. In November 2014, bswift was sold to Aetna for $400 million, highlighting the strategic importance of benefits technology in today's market.
"Benefits technology is an exciting space to be in at the moment, and we believe PlanSource is uniquely positioned to succeed," said Chris Busby, Partner at Great Hill Partners. "PlanSource has thoughtfully navigated an increasingly complex industry and positioned itself for future growth. We have nothing but confidence in the company's ability to continue to drive growth and innovation in the benefits technology sector, and we are looking forward to a successful partnership."
PlanSource provides the industry's most flexible and extensible health exchange and benefits engagement platform in the cloud. More than 8,000 employers and 3.5 million consumers use the PlanSource Platform for benefits shopping, enrollment, billing and ongoing administration. PlanSource partners with leading insurance carriers, brokers and government entities to provide both exchange and non-exchange solutions to companies of all sizes. PlanSource – One Source. Many Benefits. Learn more at www.plansource.com.
About Great Hill Partners
Great Hill Partners is a private equity firm that has raised $4 billion in capital commitments to finance the expansion, recapitalization or acquisition of growth companies within the business and consumer services, media, communications and software industries. Great Hill targets investments of $25 million to $150 million. For more information, please visit www.greathillpartners.com.
PlanSource is a registered trademark of PlanSource, Inc., and PlanSource owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.