Catch co-founder Kristen Anderson tweeted Monday that the health and retirement benefits company she and co-founder Andrew Ambrosino started six years ago is shuttering.
Anderson and Ambrosino created Catch “with a crazy idea that our benefits shouldn’t be tied to traditional employment and a W2 form,” she explained in a Twitter thread and post on the company’s website.
“We were audacious enough to believe a trillion-dollar ecosystem built by corporations, the government, and our financial institutions over the last 75 years could be toppled by a startup turning everything on its head,” Anderson wrote. “Today? We still believe that. We just have to admit that we aren’t the ones to do it right now. We have made the difficult decision to shut Catch down.”
In the tweet, Anderson individually addressed Catch’s customers, investors, team, friends and those who she labeled “less-than-friends” about their support as Catch scaled its app to provide payroll and benefits for people who are self-employed.
Anderson previously spoke with me in 2021 when Catch raised $12 million in Series A funding. The round was led by Crosslink and included existing — and might I add high-profile — investors, including Khosla Ventures, NYCA Partners, Kindred Ventures and Urban Innovation Fund. In total, the company raised $18.1 million in venture-backed funding since it was started in 2019.
While it took the Catch team of 15 (in 2021) nearly two years to get approvals to sell its platform in 38 states on the federal marketplace, the company ultimately had insurance licenses with 47 states and the District of Columbia, according to its website.
Upon getting those insurance approvals, Catch became one of only eight companies at the time to reach that milestone, additionally becoming one of three approved to sell benefits to consumers, Anderson said.
Anderson, whose Twitter profile now reads “failed fintech founder,” received an outpouring of support to her tweet. Anderson didn’t respond to a request for comment.
Anderson doesn’t specifically mention why the company decided to shutter in the tweet, but in an email sent to Catch users, and obtained by TechCrunch, Anderson and Ambrosino write, “unfortunately, we aren’t able to continue operating in the current market…” and that all Catch accounts would be closed on April 6.
While talking about the Series A in the 2021, Anderson mentioned eventually going after a Series B round. However, in the last year, the fundraising environment has became stringent, especially for insurtech companies. As several of my colleagues have noted in recent stories, investment into the insurtech sector fell in the fourth quarter of 2022 to its “lowest level since Q1 2020,” while insurtech led in M&A exits in 2021.
“Our only hope at building a strong and successful middle class is to make it easy for a new type of worker to build assets and protect their families,” Anderson wrote in her tweet. “There are more iterations of these ideas to come, and we hope that our work and learnings have moved them forward.”