Clover Health — An “Exceptional” Investment

By Josh Kopelman

Today, we’re thrilled to announce our investment in Clover Health.

Clover is not a typical company — and our investment here is not our typical investment.

First Round is a seed stage firm, and our average initial investment has remained $500K–600K for the last 8+ years. Our $4M investment in Clover is the largest initial investment we’ve ever made in our decade-long history (In fact, it’s more than double our previous largest investment).

The unique nature of our investment here underscores exactly how unique we think Clover is. It deserves to break the mold in more ways than one. Its mission to improve health care and drive down medical costs is big, ambitious, and vital.

It’s abundantly clear that today’s health insurance market is broken. When it comes to technology, the giants shaping the industry are trailing 20 years behind. They have vast stores of data but aren’t leveraging them to improve the standard of service or care. Building a new model powered by advanced analytics, Clover is able to raise the bar for patients by connecting them more closely to their physicians, expanding access to medications, and improving monitoring of preventative care and chronic conditions.

Clover delivers a lower cost, improved Medicare Advantage experience for its members, including a $0 monthly premium, $0 co-pay for primary care doctors, $0 payment for generic prescriptions, and enhanced out-of-network benefits. In the first half of 2015 alone, Clover members experienced nearly 50% fewer hospital admissions and 34% fewer hospital readmissions than the average Medicare patient in the New Jersey counties it serves.

After meeting Clover’s founders, Vivek and Kris, through other extraordinary members of the First Round Community — namely Flatiron CEO Nat Turner, who is joining me on Clover’s board — and hearing their story, we knew we wanted to be a part of it, even if it meant a one-time departure from our seed stage roots.

And while our investment in Clover is actually the company’s “first round” of outside capital, our increased check size does not mean that we’re shifting our laser-focus from seed stage or moving upmarket. Our core competency remains writing checks for $250K to $750K, and we’ve always believed in the power of specialists in venture capital. Our goal is to be the world’s best partner for seed stage companies, doing everything we can to help them succeed in the first 18 months. It’s what we’ve done for 10 years and will do going forward.

Clover is an exceptional company — reinventing an exceptionally large market in an exceptionally powerful way. We think that’s worth making an exception to our typical seed stage strategy.