The cost of healthcare is increasing rapidly and for employers, managing these costs is a significant hurdle. Many employers are opting to cut back on benefits that are offered to employers, saving on premiums but costing employees more per visit, which in turn, leads employees to become less likely to see doctors. This is a vicious cycle that ultimately increases overall costs over time and poorer health outcomes. Pasito is a data-driven benefits navigation platform that allows both employers and employees to optimize the benefits that are offered to ensure that the goals of providing a valuable safety net is balanced with managing costs. The platform covers the entire benefits spectrum; not just healthcare by integrating with a company’s HR data stack to ensure that employees are able to make informed decisions that are tailored to individual circumstances. Pasito estimates it can save up to $1M per year for a 1000-person company by reducing the 61% of employees that opt into benefits that are never used.
AlleyWatch caught up with Pasito Cofounder and CEO Pauline Roteta to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Seed. Our investors include Y Combinator, Core Innovation Capital, FiDi Ventures, Google, Segal Ventures, and strategic angel investors from finance, health, HR and insurance.
Tell us about the product or service that Pasito offers.
Pasito saves companies and employees money on healthcare and payroll. Pasito’s technology integrates directly with a company’s HR systems and processes census, health, financial, and family data to guide employees through benefits selection and engagement throughout the year.
What inspired the start of Pasito?
As a Certified Financial Planner®, I knew what an impact employee benefits can have on a family’s overall financial health and wellness. I also knew that it’s incredibly difficult to navigate those benefits without the help of a professional, which most people cannot afford. This is a serious problem for employers, who end up throwing away hundreds of thousands to millions of dollars in unnecessary spending every single year. Julie, Ignacio, and I united around the idea to build a big business that would deliver a big impact.
How is Pasito different?
Impact: With our technology, employees save thousands of dollars every year optimizing their benefits, while companies drastically cut wasted benefits spending. A company with 1,000 employees can reduce up to $1M in wasted spend every year.
Full picture: Our proprietary models offer guidance across the entire benefits package, not just health insurance.
Year-round: We support companies and employees year-round.
What market does Pasito target and how big is it?
We straddle the health, wellness, and insurance markets, and we’re initially targeting an $11B opportunity.
What’s your business model?
We’re a B2B company and charge employers a subscription.
How are you preparing for a potential economic slowdown?
A core value of using Pasito is cost savings for our employer partners. With Pasito, our customers see more efficient benefit programs with higher ROI. It’s a no-brainer for employers to partner with us during an economic slowdown. Given healthcare premiums are rising and the legal requirement for our customers to offer health insurance and meet compliance needs, we provide a valuable solution during both good and hard economic times. When it comes to the company itself, we keep our budget optimized to make every dollar count.
What was the funding process like?
We were lucky to find early supporters who made introductions to other investors who oversubscribed our round. In the end, we had our choice of funding partner, and we are thrilled to be working with leading investors in the insurance, fintech, and HR space.
What are the biggest challenges that you faced while raising capital?
Fundraising is always challenging because you must step away from your day job doing what you love to focus on the round. The biggest challenge was managing our raise while also shepherding our sales pipeline and product build. We’re very happy to have our full focus strictly back on delivering for our customers and building an exceptional product.
Fundraising is always challenging because you must step away from your day job doing what you love to focus on the round. The biggest challenge was managing our raise while also shepherding our sales pipeline and product build. We’re very happy to have our full focus strictly back on delivering for our customers and building an exceptional product.
What factors about your business led your investors to write the check?
We truly have an all-star team. Ignacio Ampuero, our CTO, played a key role in building Amazon Alexa’s knowledge graph at Graphiq (acquired by Amazon). Julie Scotland, our CGO, led the MyCase (acquired) marketing team at SaaS unicorn AppFolio (IPO). Between their careers and my own as an investor at BlackRock, investors saw our drive, focus, and track record to deliver big results. Many of our investors are people we have worked with in the past. Our industry investors see the many gaps in the benefits and insurance market that we can fill, and they love our fresh take on how the employee experience should be (not how it’s been).
What are the milestones you plan to achieve in the next six months?
We have some really exciting products launching soon that will further drive employee engagement, health, and overall company savings. Stay tuned.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Stay lean and stay focused on building your business. There’s no easier time to fundraise than when you’re hitting your milestones.
Where do you see the company going now over the near term?
Our mission is to deliver better health and financial outcomes to families, and to be a staple in every employee benefits package across the country. We’ll continue to add products that maximize dollars for our company partners while driving significant impact to our employee users.
What’s your favorite outdoor dining restaurant in NYC?
My tiny patio & my husband’s grill – all founders welcome. But when ready for a night out on the town, I love Los Mariscos in Chelsea Market. Best margaritas and fish tacos in the city.
