TORONTO (Reuters) - Canadian health insurance startup League Inc has raised $25 million in early-stage funding from backers including the country’s biggest bank, according to its chief executive and co-founder.
Mike Serbinis, who also ran e-book company Kobo before it was sold to Rakuten Inc (4755.T) for $315 million in 2011, said League plans to launch its own insurance products in the next few months as it expands across Canada and in the U.S. Pacific coast states of Washington, Oregon and California.
The company, which is also targeting New York, Dallas and Boston this year, sells software that helps employers manage employee benefits, with the aim of cutting costs and reducing paperwork.
Serbinis said the initial focus is on small businesses, many of which do not currently offer health benefits to employees. While traditional health insurance claims might cost dollars or tens of dollars to process, “it costs us less than a penny,” he said.
“Insurance is just another commodity waiting to be Uber‘d,” he added in a phone interview, referring to the ride-hailing app that has played havoc with the traditional taxi industry.
The series A financing round was led by OMERS Ventures and included investments from Canada’s largest bank Royal Bank of Canada (RY.TO), Manulife Financial Corp (MFC.TO), and Power Financial Corp (PWF.TO), as well as Mike Lazaridis’ Infinite Potential Technologies, League said in a statement.
League and its backers did not disclose the size of the stake or what value it puts on the company.
The cash injection is one of the biggest ever series A raises for a Canadian life sciences company, according to Thomson Reuters data.
Venture capital investment in the Canadian life sciences arena has been growing steadily for several years, with some C$312 million ($243.73 million) invested so far this year, not including the League announcement, compared to C$175 million from the same time a year ago.
It is already the best first half for this type of investment in Canadian life sciences companies since 2007, when companies secured C$376 million in the first six months.
($1 = 1.2801 Canadian dollars)
Reporting by Alastair Sharp; editing by Diane Craft