A digital health plan with strong ties to Buffalo has raised $34 million from investors and plans to add more jobs locally.
Centivo is based in New York City and has 32 employees at its Cheektowaga office. Its co-founder and CEO is Ashok Subramanian, a local native who was a partner in Liazon, a successful startup that was sold seven years ago.
The latest round of fundraising for Centivo was led by B Capital Group, a global technology investor. One of the investors was Buffalo-based Rand Capital, which has invested in Centivo before.
"The rising cost of health care continues to be a challenge for both employers and their employees," said Karen Page, general partner at B Capital Group. "Centivo is structurally lowering the cost of health care purchasing by using technology and analytics to create efficiencies and improve outcomes.”
Subramanian said Centivo will direct the funds toward three different uses: enhancing and expanding its current product offerings, growing into new markets and hiring more people.
Centivo has about 85 employees and expects to double the size of its workforce over the next 18 months, Subramanian said.
“Buffalo is where the majority of our workforce is and where the majority of our growth is likely to be,” he said.
Employees at Centivo’s Cayuga Road office handle a range of tasks, including paying claims, answering members’ calls, managing employer accounts, performing analytics and corporate functions such as finance, accounting and human resources.
Subramanian is a Williamsville native who now lives in New York City. He launched Liazon in 2007 with two partners. The company operated private health exchanges and was sold for $215 million in 2013 to Towers Watson.
Subramanian left Liazon four years ago, taking with him lessons about individuals’ need for high-quality health care at an affordable price.
“We lead every single presentation we do, whether it’s to an investor, an employer, a partner, about the affordability crisis in health care and the types of folks that deserve better," he said. "That was really important to us as we were looking for capital partners.”
Centivo serves clients in the New York City metro area, Southern California, Florida and North Carolina. The company also serves employers in other areas through third-party networks. Centivo has collaborated with Independent Health on some products and services for customers in the Buffalo area.
Subramanian said Centivo has a strong "social impact" mission that is vital to its operations.
“If the business does well, that’s great," he said. "But the true of value of what we’re doing at Centivo is to actually help solve the social problem of the inaccessibility of health care.”
Centivo was established in 2017, built its product during 2018, and launched its first client at the start of 2019. Prior to the latest round of funding, Centivo had raised $33 million from investors.
Subramanian said he is enthusiastic about the local workforce.
“I don’t think there’s a better workforce anywhere in the world than there is in Western New York,” he said. “I think it’s a combination of the quality of public education, the work ethic, the loyalty to the community, the integrity with which people operate.”
And Subramanian said customer service is core to Centivo’s business.
“There’s just an extra special level of support and enthusiasm that people get when they pick up the phone and talk to somebody in Western New York,” he said. “We’re the City of Good Neighbors for good reason.”