Tango Health Raises $4 Million in Series B Funding

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Tango Health, the premier provider of Health Savings Account (HSA) management software and services, announced today that it has closed $4 million in Series B funding led by S3 Ventures and angel investor Mike Turner, founder and CEO of Waveset (acquired by Sun Microsystems). The new funds will be used to increase marketing and sales, expand product development into adjacent markets, and support the rapidly expanding base of Tango Health users.
“The efficiency and completeness of the company’s technology, education and service is unlike any other solution in the employee benefits market.”

“Tango Health is transforming the way HSAs are managed, similar to the way Intuit transformed consumer finance with its TurboTax and Quicken products,” said Brian R. Smith, managing director at S3 Ventures. “The efficiency and completeness of the company’s technology, education and service is unlike any other solution in the employee benefits market.”

A fundamental shift is underway in the health care market. HSAs are rapidly gaining ground as more and more employers move toward consumer-directed health plans (CDHPs) to offset the rising cost of employee health care benefits. According to a survey by the National Business Group on Health, a nonprofit association of 329 mostly large U.S. employers, in 2012, 73 percent of employers will offer CDHPs compared to 61 percent who did so in 2011. Most of these will be high-deductible health plans with health savings accounts.

“We founded Tango Health because we recognized that employers need help navigating the multi-decade sea change to consumer-driven healthcare,” said Duncan Van Dusen, co-founder and CEO of Tango Health. “Administering HSAs is very challenging for employers, on top of the fact that most HSA management solutions work well for only about one-third of the employees who choose high-deductible plans. Our flagship HSA solution solves these problems while maximizing tax savings and employee participation in HSAs.”

Recent Company Milestones

  • Selected by Insperity (NYSE: NSP), a leading provider of human resources and business performance solutions, as its HSA management solution for approximately 100,000 worksite employees.
  • Sustained average HSA account open rates of 99% of eligible employees across its portfolio – almost double the 51-58% industry average reported by a 2008 U.S. GAO study.
  • Selected by 5 industry leading health plan administrators to offer HSA management services to their employer customers, including ACEC Select Life/Health Trust, Consolidated Health Plans, and EMI Health.
  • Completed integration with 3 health insurance carriers and more than 45% of debit or credit cards in circulation, including American Express, Bank of America, Chase, Citibank, Discover, and USAA.

Duncan Van Dusen, CEO, and Todd Praisner, president, co-founded Tango Health in 2008. Previously, they held senior management positions at Works, a financial software company acquired by Bank of America in 2005.

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