Alphabet makes a $375 million bet on Obamacare startup Oscar

(Bloomberg) – Alphabet Inc. is putting $375 million into Obamacare startup Oscar Health, the latest healthcare investment from Google’s parent company.

Oscar plans to use the funds to help fuel its entrance into the lucrative market for privately administered health-insurance plans for seniors, known as Medicare Advantage, in 2020, Chief Executive Officer Mario Schlosser said in a statement. Salar Kamangar, the former CEO of YouTube, will join Oscar’s board, the company said.

An examination room is seen at the Oscar Center in the Brooklyn borough of New York, U.S., on Wednesday, Dec. 7, 2016. The Oscar Center runs in partnership with Mount Sinai Health Systems providing primary care services and health and wellness programs. Photographer: Kholood Eid/Bloomberg

Before the latest investment, Oscar had raised almost $900 million, garnering a $3.2 billion valuation. Other Alphabet units including life-sciences arm Verily had previously invested in Oscar, whose co-founders include Schlosser and Josh Kushner, the brother of Jared Kushner, a top adviser to President Donald Trump.

The magazine Wired reported on the investment earlier on Tuesday. In the Wired article, Schlosser said the investment is financial and that the companies don’t have any immediate plans to collaborate more closely.

Oscar has been selling health plans under the Affordable Care Act since 2013. The New York-based company has about 240,000 members this year, and plans to expand into several new markets in 2019.