Oscar, a Health Insurance Start-Up, Valued at $1.5 Billion

Sixteen months after going live, the insurance company Oscar has joined the elite group of start-ups known as unicorns, or those with billion-dollar valuations.

The company plans to announce on Monday that it has raised $145 million from a group led by the billionaire Peter Thiel and his Founders Fund venture capital firm. Other investors in the round included the Hong Kong billionaire Li Ka-shing’s Horizon Ventures, the Wellington Management Company and Goldman Sachs.

The investment values Oscar at about $1.5 billion, more than three timesits valuation last January.

It’s a heady rise for Oscar, which in contrast to technology darlings like Uber and Airbnb focuses on the less flashy business of health insurance. Unlike most other insurers, it operates only in New York State for now.

But Oscar has drawn fans among investors for trying to upend the traditional model with a more modern approach built on technology and friendlier customer service. Among its innovations are an intuitive website — type in symptoms in plain English and receive a list of prospective treatment providers — free calls to doctors and more price transparency.

The insurer says it has enrolled about 40,000 customers, nearly triple what it had a year ago.

With the new capital, along with interest from other states in having the company set up shop in their regions, Oscar plans to expand.

“Now we feel ready to expand our products to other states,” Joshua Kushner, Oscar’s founder and chairman, said in a phone interview. “There has been such strong customer satisfaction, we thought we were ready to push the product forward.”

Health insurance wasn’t the most intuitive industry for Mr. Kushner, the son of a prominent real estate family and a venture capitalist in his own right, to start a company. But he said that the insurance industry had lacked innovation — he said Oscar was the first new commercial health insurer in more than a decade — and was sorely lacking in an option that paid significant attention to customer service.

“This is a relationship that is so important from a human and financial perspective, but it wasn’t intuitive,” he said.

Mr. Kushner said that he and his co-founders had originally approached other insurers about building technology tools for them but had been rebuffed. They then turned to starting their own insurance operation, albeit without having first fully understood the complexities of the business.

With 16 months under its belt now, however, Oscar is ready to expand its product offerings. The company thinks that by being vertically integrated, controlling both its insurance operation and its technology, it can start offering new services that Mr. Kushner declined to identify.

“I really believe that the fact that we own our own system will give us control of our own destiny,” he said. “In the health care world, we think we’re just getting started.”

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