Arlo, an AI-based health insurance underwriter focused on small businesses, has announced the successful completion of a $4 million seed funding round. The round was led by Upfront Ventures, with additional participation from 8VC and General Catalyst.
Within its first year of operation, Arlo has already facilitated mid-eight figures in premiums. The company is working with industry-leading reinsurers, including Nationwide, to deliver innovative health plans. These plans prioritize long-term health outcomes rather than short-term care denials, a critical distinction in the current market.
The rising cost of health insurance has been a persistent challenge, especially for small businesses. Premiums have increased significantly, continuing a decade-long trend that has seen costs climb by 49%, significantly outpacing general inflation. Small businesses, which employ nearly half of the private workforce in America, are disproportionately affected by these rising costs. Many are forced to either absorb unsustainable costs or shift the burden to employees through higher deductibles.
The consequences for employees can be severe, including delayed medical care, unexpected claim denials, and time-consuming battles with insurance bureaucracy. Frustration is growing with a system that at times seems designed to restrict access to care.
While larger employers can leverage their size to negotiate better rates and customize health plans, small businesses often lack this bargaining power. They are left with few options from traditional insurance carriers. Arlo aims to address this gap by offering affordable, self-funded health insurance coverage tailored for for small and mid-sized businesses and is built on value-based care and cost transparency.
Arlo’s AI-enabled underwriting technology allows the company to create a model that:
- Rewards preventative care to keep employees healthier and costs lower.
- Aligns incentives so employers, employees, and providers all benefit.
- Identifies risks early to facilitate better health outcomes.
The company’s growth has been fueled by strong partnerships with leading benefits firms. The team also brings together expertise from Palantir, Finch, Gusto, and WTW. With this new funding, Arlo plans to advance its mission of providing affordable, high-quality, and long-term oriented benefits to small businesses across the country.
Key Quotes:
“The challenge in healthcare isn’t just rising costs—it’s misaligned incentives. By building new risk transfer and AI-driven underwriting infrastructure, we’re creating a system where investing in preventive care and health initiatives delivers both immediate savings and long-term stability for small businesses.” – Jan-Felix Schneider, Co-Founder and CEO of Arlo
“Upfront is thrilled to support Arlo as they tackle one of the most pressing challenges in healthcare. With their underwriting technology, easy-to-use quoting for brokers, and a deep understanding of the small group market, Arlo is uniquely positioned to transform how small businesses access and manage health benefits. At a time when frustration with legacy carriers is high, Arlo is the right company at the right time to take on this $275 billion market opportunity.” – Kevin Zhang, Partner at Upfront Ventures
“Arlo has assembled a stellar team of disruptors and deep expertise to tackle this space, and we’re excited to be part of the journey.” – Sebastian Caliri, Partner at 8VC
