How Thatch secured a $38M Series A using Velo’s fractional CFO services
The leading healthcare benefits platform used Velo to model growth scenarios, restructure accounting, reporting, and unit economics analyses, as well as expedite financial due diligence with investors.
Thatch is an innovative healthcare benefits platform that provides organizations with more competitive and flexible employee healthcare coverage. Since its inception in 2021, Thatch has served hundreds of companies — ranging from lean startups to large enterprises. The company has raised $44M of institutional investor capital.
As it scaled, Thatch needed a solution for managing mounting financial complexities
As a company that operates at the intersection of healthcare, fintech, and software, Thatch faced increasing financial complexities as it scaled. The company’s accounts receivable and flow of funds needed to be organized, clarified, and quality-controlled for ongoing accuracy and granularity.
But even more so, Thatch’s underlying financial model needed to be rebuilt. Specifically, it needed one with a structure that investors could leverage to analyze KPIs and understand the unit economics of the unique business model, because Co-founder and CEO Chris Ellis and his team were preparing for a Series A capital raise.
Because of its unique business model, Thatch’s most commercial — or even enterprise-level — accounting or CFO solutions didn’t work. And without proper accounting infrastructure, the company's leaders couldn’t easily understand the tradeoffs of investing in various business initiatives.
Other options were also limited: Thatch wasn’t ready to hire an internal CFO and support staff, as finance salaries hit record highs in 2024. It would be incredibly difficult to find a finance team with the expertise needed to manage Thatch’s complex financial model reliably, which encompassed several unique revenue streams.
Without this support, Chris was stuck with time-consuming exception handling. Closing the books took 30 days longer than it should have taken, rendering the insights outdated and largely unusable. The decaying information then impacted the executive team’s ability to devote sufficient attention to more strategic work, such as fostering investor relations and robust scenario planning.
Chris knew this demanding workflow couldn’t go on. During his continued search for a bespoke financial solution, he discovered that Velo’s fractional CFO services and specialized team of finance veterans were the perfect fit.
“Trying to manage complex finances yourself just isn't worth it; it’s not good for the business. You need a bespoke financial services solution like Velo if you're going to profitably scale as a venture-backed company.”
With Velo’s expert-backed financial services, Thatch successfully navigates crucial growth periods
What sold Chris on Velo was the team’s deep fintech expertise. Founded by professionals from renowned companies like Ramp and Jeeves, Velo clearly understood Thatch’s nuanced, multifaceted business model and was immediately equipped to address its unique situation.
Our team of experts created a bespoke financial model which visually separates the business into independent revenue streams — and their corresponding cost buckets. It also shows go-to-market performance by channel. The new visibility allows more reliable, strategic decision-making around capital allocation across products and channels, and forecasts financial profile and investment benchmarks over three (or more) years.
Velo also took over the engine that feeds the financial models: bookkeeping and accounts payable tools and processes. Having the work done — with 90% improved accuracy — frees up Chris’ time to strategically think about how to leverage the model’s insights to improve profitability.
But Velo’s most crucial value-add was still yet to come.
Thatch was entering talks with venture capitalists to raise a Series A. To support this initiative, Velo prepared Thatch’s financials for pitches by producing multiple model scenarios, an up-to-date data room, and all the necessary accounting reports ahead of these talks. Then, Velo stood by to support the subsequent diligence processes — a deep, often uncomfortable examination that many founders dread.
Equipped with this support, Chris didn’t just feel more confident going into negotiations; he had reason to be more confident when presenting his company’s financials to investors. In his words, Thatch’s new and sophisticated financials were “vital” in increasing the odds of a successful fundraising season.
“Velo’s fractional CFO services give me confidence in what we report to investors and the team. It also frees up time to do more strategic thinking around the financial model rather than worrying about whether it's right.”
Thatch solidifies its financial position and closes the books 30 days faster
Partnering with Velo was a critical step in helping Chris establish a solid financial foundation that bolsters Thatch’s continued growth:
Looking ahead, Chris plans to build upon this established financial foundation as Thatch scales. The growing relationship with Velo will prepare Thatch for equally successful fundraising rounds that keep the company’s momentum going strong.
“Velo’s domain expertise makes them great at handling complexities, but combine that with the fact that they're just incredibly high quality, talented individuals — that pairing is their secret sauce.”
