Take a trip to the midwest and you’ll notice it has played a special role in the foundation of our nation’s healthcare system. Epic hails from Wisconsin. United Healthcare from Minnesota. Elevance from Indiana. But over a thousand miles away in a nondescript building on 21st Street in the middle of New York City is a team of misfits plugging away at critical plumbing for the next phase of healthcare innovation: Yuzu Health. Walk into the Yuzu office, and you’ll notice it’s an irresistibly serious but fun (and unserious) culture. Founders Max Kauderer, Ryan Lee, and Russell Pekala don’t hail from traditional healthcare backgrounds: they built consumer apps in college, have gone deep on payments infrastructure, and worked at financial services giants. In our opinion, they’ve quietly assembled a uniquely scrappy and curious team of top-notch technical and operations people to tackle a big problem. Some Yuzers come fresh to health insurance from top schools like Harvard and MIT and top-tier engineering organizations like Amazon, while others worked their way up at other payer organizations and came to Yuzu with a battle-scarred playbook for operations and product building. 

Yuzu is a unified operating system and third-party administrator (TPA) that allows innovators to launch and manage new health plans. This is more critical than ever. Late last year, the US government shutdown put our nation’s healthcare crisis on full display. Employer healthcare costs are breaking. Premiums for family coverage hit $25,572 in 2024, up 52% over the past decade, and 2026 projections show 9-10% increases, the steepest in 15 years. 

Incremental solutions have been attempted. Employers have pushed what they can onto employees. Network narrowing has shown limited impact. We believe the final frontier is plan design itself: cash payment, dynamic copays, and direct contracts that can fundamentally bend the cost curve without surprising members. We already see evidence of this working in the market: United Healthcare’s Surest has been one of the most popular and fastest-growing plans in America. About two-thirds of respondents to McKinsey's Employer Health Benefits Survey say they are looking to switch carriers over the next four years or less, likely seeking alternative plans that reduce costs and improve member experience. With Yuzu, the infrastructure to deliver these innovative health plans at scale now exists.

Infrastructure Built Different

Being semi-outsiders has allowed the Yuzu team to build from first principles. Unlike many TPAs that rely on a bevy of fragmented software vendors, the team spent nearly two years writing every line of code in-house: claims engine, payments ledger, member systems, and beyond. Instead of relying on generally accepted data structures, the team has borrowed frameworks from other industries to reimagine the fundamental data structures of a claim. The result is a single, unified platform that enables transparent line-item ledgering, plan configurations in hours (not months), and lays the groundwork for real-time claims adjudication and same-day payments. Health plans and brokers can now launch benefit designs that were previously available only to the largest enterprises. The US spends $5T a year on healthcare, and an estimated 15-30% of that is spent on administrative costs. As we imagine a world where AI might help us reduce waste and excessive cost in healthcare, we see Yuzu as a very well- positioned piece of critical infrastructure, as it has the holistic context that only a unified system can provide. 

A Catalyst for Change

Over a decade ago, we partnered with companies that would go on to become critical infrastructure enabling the tidal wave of innovation that was to come in global commerce. Today, we hope to see a similar parallel in healthcare as we announce we are leading Yuzu Health’s $35M Series A. As Max Kauderer, CEO at Yuzu puts it: “I don’t want to be prescriptive on what the health plan of the future will look like. I fundamentally believe health insurance will evolve…and my hope is that we are the company that can serve as a catalyst for change.”