KC-built startup brokers $18M funding round as benefitbay pushes market trends to the norm

A just-announced $18 million Series A round for benefitbay is more than just investor or market validation, said Brandy Thompson; it’s a signal that the solution she built in Kansas City is no longer part of a niche conversation with consultants and employers — too often requiring lengthy explanations about why the model matters.

“Honestly, it’s incredibly rewarding because this company was built around a very real problem that so many employers and employees are struggling with every day,” said Thompson, founder and CEO of benefitbay, a leading Individual Coverage Health Reimbursement Arrangement (ICHRA) partner serving the nation’s top brokerages, employers, and their employees.

Led by Ten Coves Capital, the investment is expected to fund the next phase of benefitbay’s growth, she said, strengthening the infrastructure layer underneath ICHRA as the market matures.

“That means deeper carrier and payroll integrations, expanding our payments capabilities beyond medical, and continuing to build tools that help brokers and employers scale operationally,” Thompson said. “One thing that sets us apart is that we have built direct banking and carrier integrations allowing scale and eliminating a lot of the middleware friction competitors rely on and lets us support larger enterprise clients efficiently.”

The company also is investing heavily in the employee experience, specifically around the future of care navigation, she added.

“Healthcare is incredibly personal and often confusing, so we want to make the enrollment and decision-making process much simpler and more intuitive for people navigating these choices,” Thompson said. “For many of these employees, this is the first time they have ever had real agency over their healthcare decision. We want to make sure they are equipped to use that choice wisely.”

Stable path forward

The $18 million round — along with an investment from KCRise Fund III in late March — affirms the credibility of Thompson’s Kansas City-built brand, as well as its grasp of the market (and where it’s headed), she said.

“A few years ago most employers were still trying to understand what ICHRA even was,” Thompson said. “Today, those conversations have shifted toward implementation, particularly among mid-to-large employers who have hit a wall with their self-insured plans. An ICHRA with benefitbay gives them a stable path forward.”

benefitbay spent years building the operational infrastructure, broker relationships, compliance systems, and integrations needed to support this ICHRA transition at scale, she said.

The company was founded with a deliberate broker-first strategy and today supports more than 40,000 covered lives across a national footprint of premier brokerages.

“Until now, we have grown almost entirely through word of mouth and trust within the national brokerage community,” Thompson continued. “This raise reflects growing confidence not only in benefitbay, but in the broader movement toward defined contribution and choice in healthcare.”

Kansas City remains an important part of that story, she added.

“Building from the Midwest while watching coastal competitors raise massive rounds of capital is something every founder here understands,” Thompson said. “I leaned on advice from Kansas City’s Michael Rea of RxSavings Solutions, who had navigated that same tension. His advice was straightforward: stay focused, build capital efficiently, don’t get distracted and let the results do the talking. That has stayed with me.”

Aaliyah Aramjoo, KCRise Fund

Those results — and Thompson’s team’s keen insights — played critical roles in KCRise Fund’s decision to invest, said Aaliyah Aramjoo, associate at the Kansas City-based fund.

After first meeting the founder in 2024, she noted, it became clear ICHRAs were shifting toward becoming the norm in the benefits space — and benefitbay was positioned to be one of the defining names in the category as it grew.

“They’ve built a product that competes against companies who’ve raised many multiples more capital, which speaks volumes about their ability and tenacity,” said Aramjoo. “They’ve also leaned into the broker channel from the start, which has been a real competitive advantage in the benefits space. Brandy is a sharp, steady operator, and we’ve enjoyed getting to know her over the last couple of years.”

“benefitbay is the kind of company we love backing,” she added. “It’s Kansas City-based, competing nationally, and winning on substance rather than spend.”

Expertise matters now

benefitbay’s next phase of growth is about scaling responsibly alongside the market, Thompson said, noting the investment is expected to carry the company to profitability.

“We are seeing increasing demand from larger brokerages and enterprise employers, so a major priority is continuing to deepen our infrastructure and operational capabilities while maintaining a high level of service and support,” she said. “We have a 96% client retention rate with mid-market employers, and we intend to maintain it as we grow.”

Kevin Mullins, benefitbay

The company also recently hired Kevin Mullins as its first president and chief financial officer, bringing operational depth, financial discipline, and growth-stage healthcare experience to help benefitbay scale, Thompson said.

“That expertise matters right now,” she said.

“At the same time, we want to continue leading the conversation around what modern healthcare benefits should look like,” Thompson continued. “There’s still a tremendous amount of education needed in this space, and benefitbay is uniquely positioned to help bridge that gap between employers, brokers, carriers, and employees. And we plan to keep doing that work from Kansas City across the nation.”

Beyond macro tailwinds indicating changing trends within the industry, Ten Coves was drawn to three elements of benefitbay’s business, the investor said: the broker channel as the durable demand aggregator for ICHRA, the company’s payments and reconciliation architecture as a meaningful technical moat, and a track record of winning and retaining large employer groups.

“What stood out to us about benefitbay is the quality of what the team has built and the conviction with which they’ve built it,” explained Michael Lipin, principal at Ten Coves Capital. “The platform reflects a deep understanding of how brokers, employers, and employees actually engage with health benefits, and that understanding shows up in the product, the partnerships, and the results.”

Thompson agreed it’s validating for her team to see enterprise employers actively moving in the direction benefitbay forecast, with investors recognizing long-term opportunities with the company.

“Finding the right investor partner at this stage was important to us and we were patient,” she said. “Ten Coves understood the fintech dimension of what we have built, the financial architecture and payment infrastructure underneath the product, without needing to be convinced of that value in delivery to the benefits ecosystem.”

At the same time, it reinforces how much work still needs to be done, Thompson added.

“Healthcare remains deeply complicated and expensive for people, and we will continue to approach this with a builder mentality every day,” she said. “We hope this is a motivating story for other founders building in Kansas City and across the Midwest. Having the support of KCRise Fund alongside a national fintech investor like Ten Coves is a reminder that the coastal capital and the Midwest community can come together to build impact in health outcomes.”