For Health Insurance Startup Oscar, Cute Ads Only Go So Far

Health insurance hasn’t attracted much money from Silicon Valley investors. The industry is highly regulated and fiercely competitive, and turning a profit depends on signing up healthy customers and getting favorable prices from hospitals and doctors. Still, investors, including some Facebook backers, put hundreds of millions of dollars into health insurance startup Oscar.

“Insurance is a confusing system, confusing as hell,” says Mario Schlosser, a computer scientist and former McKinsey consultant, who is Oscar’s chief executive officer. He co-founded the company two years ago with fellow business school alums Joshua Kushner of venture capital firm Thrive Capital, and Kevin Nazemi, a veteran of Microsoft’s health-care division. They hope to capitalize on the young, tech-savvy customers buying health insurance through the new markets created by the Affordable Care Act. Oscar operates in New York and New Jersey and will start selling coverage in California and Texas in November.