The Modern Operating System for Health Insurance: Our Series A investment in Yuzu Health

Healthcare costs are rising at their fastest pace in 15 years—one of the defining challenges of our time.

As we dug into why, we found something surprising: many of the solutions already exist. Innovative plan designs—cash pay, direct contracting, dynamic copays—can meaningfully reduce costs.

They just haven’t scaled.

Why? Because the infrastructure behind health insurance can’t support them. The system is too brittle, too fragmented, too manual.

The bottleneck isn’t the care itself—it’s the administration of care.

We first met Yuzu’s CEO, Max Kauderer, at a dinner we co-hosted with Box Group in NYC over a year ago. Walking out, Bohan, Kristina, and I all had the same reaction: this person is special.

That instinct sent us down the rabbit hole. Over the next few months, we immersed ourselves in the third-party administration (TPA) market—how it works, where it breaks, and why it’s been so resistant to change.

As we got to know Max better, we also spent time with his co-founders, Ryan Lee and Russell Pekala—both of whom had worked at former portfolio companies of mine. That made diligence unusually direct.

The feedback came back fast—and emphatic: “Russell is AWESOME. One of the best founding engineers we had—gritty, smart, relentless. We wish he’d come back!!” Ryan’s references were similarly glowing.

Most attempts to modernize TPAs fall into one of two traps: layering on top of legacy infrastructure, or trying to rebuild everything at once—and burning enormous amounts of capital in the process.

Yuzu is the first team we’ve seen with the discipline to avoid both.

Instead, they’ve taken a harder—but ultimately more defensible—path: quietly rebuilding the core system from the ground up. Claims adjudication. Member administration. Provider payments. Fully integrated. No legacy vendors. No shortcuts.

The deeper we went, the clearer it became how rare this is. Customers raved at Yuzu’s product and team. One VP of Sales put it bluntly: “I’d invest my own money in Yuzu if I could.”

Today, Yuzu powers health plans in all 50 states, has facilitated over $1B in claims payments, and operates at ~13x the efficiency of legacy TPAs. It’s the only TPA we’ve seen that owns its entire software stack in-house. It’s also one of the fastest growing companies in the Chemistry portfolio.

We’re thrilled to announce that Chemistry is co-leading Yuzu Health’s $35M Series A alongside General Catalyst. The round also includes Anthropic’s Anthology Fund, Bain Future Back Ventures, Timeless Ventures, Lachy Groom, and Neo. More affordable, higher quality healthcare is coming and Yuzu is making it happen.