(Bloomberg) — League Inc., a Canadian health-insurance startup, is raising $25 million in a funding round backed by Omers Ventures, Royal Bank of Canada and Manulife Financial Corp., which are all based in Toronto.
Toronto-based League lets employees find and pay for services such as therapy, dental work and chiropractor visits through a mobile application. League isn’t an insurer but connects insurance pools, employees and a broad array of providers through its app. It’s part of a band of new companies that are working to win customers from traditional insurers by offering services that are more flexible and easier to access through the internet or mobile apps.
The $25 million round, large by Canadian standards, was necessary to give League the firepower to compete with other health insurance startups such as New York-based Oscar and San Mateo, California-based Collective Health, League Chief Executive Officer Michael Serbinis said in an interview.
“Those guys are in different parts of the market right now, but that could change,” Serbinis said. Collective Health has raised $125 million while Oscar has raised over $700 million, according to CrunchBase Inc., which tracks venture capital deals. Serbinis declined to say the valuation of the funding round, or League’s revenue run rate. More than 500 companies are using the service.
Serbinis is as close as it gets to Canadian tech royalty, having worked at Elon Musk’s Zip2 search engine in the 1990s before founding cloud-storage provider DocSpace Co. and selling it for $350 million on the eve of the first tech bubble. He later started Toronto-based Kobo, an e-reader company that competed with Amazon.com Inc. and was sold to the Tokyo-based e-commerce giant Rakuten for $315 million in 2011.
The opportunity for League is even bigger because of the size of the health-insurance market and the frustration people have with processing claims, Serbinis said.