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LLR is seeking to partner with a Consumer Directed Health Plan Third Party Administrator (CDHP TPA) serving middle-market employers with the demonstrated ability to drive client and employee engagement and savings through technology and value-added capabilities. Companies and intermediaries working in this space should contact Pete Schwartz to discuss relevant investment opportunities.
In my over three decades in the technology-enabled HR services industry, one thing became indisputable to me: delivering premier service to clients, their employees and their advisors is essential for success. I would go as far as to say that it is one of the few things that is not a commodity.
The CDHP TPA market represents a multibillion-dollar opportunity that remains highly fragmented, creating considerable space for innovation and disruption.
As a greater proportion of costs are pushed onto employees, the adoption of consumer-directed health plans is growing rapidly, allowing consumers to take control of their healthcare spend and decision-making.
Given self-insured models have historically been utilized by large enterprises, the market is largely ill-equipped to serve the unique needs of SMB and middle-market employers in managing costs and providing cost-effective coverage.
Brokers and employers alike are demanding best-in-class technology, integrated product offerings and high-impact service, providing an opportunity for CDHP TPAs to drive improved savings and outcomes.
In 2015, benefitexpress’ founder sought a capital partner to help the business scale and invest in future growth while she stepped back from day-to-day leadership. LLR had identified benefitexpress as a market-leading and uniquely scalable platform, and invested in the company in March 2016.
We partnered with Michael Sternklar, former head of Mercer’s North American benefits outsourcing business, who became CEO of benefitexpress and brought deep industry expertise. Benefitexpress also received significant support from the LLR Value Creation Team in recruiting several key executives, sourcing acquisition opportunities and building out its sales and marketing function.
Benefitexpress acquired benefitsCONNECT in 2016, which allowed the company to accelerate its relationships with brokers and increase scale and margins. They partnered with LLR to integrate the businesses, professionalize best-in-class customer service and expand the product offering and technology capabilities.
Benefitexpress more than tripled its revenue over 5 years. The Company leveraged LLR’s network to cultivate strategic relationships with acquirors and partners and it was acquired by WEX (NYSE: WEX) in June 2021.
LLR leverage best practices developed through codifying successful strategies across our 130 investments to support companies with operational improvements and growth. Our Value Creation Team, which consists of functional experts in Strategy, Talent, Go-to-Market, Product & Technology and Finance, are available to management as needed.
LLR’s experience in benefits administration affords us a strong network of broker, payor, provider and portfolio relationships, including multiple national brokerage firms.
We’ve established a robust pipeline of opportunities to both consolidate the CDHP TPA market and broaden the capabilities of a potential investment partner.
The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.
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