The benefits that are provided by catch are not tied to employers
Every gig worker needs to have their retirement and health benefits. The company, which is in the process of moving its headquarters to New York, sells health insurance, retirement savings plans and tax withholding directly to workers. It has a fresh round of $12 million in Series A funding, led by Crosslink, with participation from other investors, to support more distribution partnerships and its relocation from Boston The company raised $6.1 million in the last year, giving it a total of $18.25 million in funding.
It took the team of 15 years to get approvals to sell its platform in 38 states on the federal marketplace. Anderson claims that only eight companies have been able to do this, and that three of them are approved to sell benefits to consumers. More companies are not offering healthcare, while more people are joining the creator and gig economies, which means more people are not following an employer-led model, according to Anderson.
The company was asked to help them set up income sources, like setting aside money for taxes, retirement and medical leave, without having to actively save, because of the age of the average customer. Many of Catch's customers saw their income collapse when the global Pandemic hit, as workers like hairstylists and cooks had income go down to zero in some cases. Anderson and Ambrosino began looking at partnership distribution and developed a network of platforms, business facilitation tools, gig marketplaces and payroll companies that were interested in offering catch Anderson said the company intends to use some of the funding to increase its headcount and go after more partnerships.
Anderson said that many of the startup's competitors do a single offering and do it well like Starship does with health savings accounts. She said that Catch is going deep on the process by offering a platform experience. She compares it to Gusto, which provides cloud-based payroll, benefits and human resource management for businesses, in that it's an end-to-end experience, but with a focus on an individual person.
The company tripled its user base over the past year because of people taking on second jobs and partnering with DoorDash. Anderson said that platform users are holding onto five times their usual balances because of setting more goals and needing to save more. Health insurance and retirement investments have grown in the same way.
Anderson is already thinking about a Series B, but it won't happen for another couple of years. The company is looking into its own product as well as disability insurance and other products to further differentiate it from other startups, like Spot, Super.mx and Even, which all raised venture capital this month to provide benefits. The federal marketplace is only one part of the audience that Catch would like to serve.
Anderson mentioned that there are some companies that offer medical benefits that can seem too good to be true, but when the customer reads the fine print, they discover that certain medical conditions are not covered. Anderson said they were looking at how to put the right thing in there. Young people have cheaper options, so they need to know what they are getting.
They talked about how to build a sustainable gig economy."