Alphabet Invests $375M in Health Startup Oscar

Global tech behemoth Alphabet Inc. (GOOGL) has taken a larger stride into the health care space by upping its investment in an insurance startup co-founded by Joshua Kushner, the brother of Jared Kushner, Donald Trump's son-in-law and a White House advisor. 

Google parent Alphabet has funneled $375 million into six-year-old Oscar Health, just a few months after two other subsidiaries, venture firm Capital G and life sciences division Verily, participated in a $165 million funding round, as reported by CNBC. In the latest round of funding, Oscar was reportedly valued at $3.2 billion. 

According to Wired magazine, the Mountain View, California-based search giant now owns approximately 10% of the startup, which intends to disrupt the insurance industry with improved technology for managing claims. Its platform uses a mix of IT, provider partnerships and member experience to offer simpler pricing for patients and greater flexibility in payment models for doctors. With the new funding, Oscar plans to expand into new cities and update its infrastructure as it doubles down on a new product called Medicare Advantage, slated for release in 2020.

Search Giant Expands Into New Growth Markets

The firm is best known for its expansion into the individual insurance business under the Obama-era Affordable Care Act and is expanding next year into six new markets. As part of the deal, Salar Kamangar, the former CEO of YouTube, will join Oscar's board of directors. 

"Pretty much everything that we do internally to manage people's health care was reinvented and rebuilt from a technology perspective. And so that's what we can now go faster toward," said Oscar CEO Mario Schlosser to Wired in an interview. 

Shares of Alphabet, down 2.4% at $1,228.39 on Wednesday morning, reflect a 16.6% increase year-to-date (YTD), outperforming the S&P 500's 5% increase over the same period. 

In the most recent quarter, Google posted earnings results that blew past consensus estimates, spurring optimism on the Street regarding its various growth businesses outside of advertising, including YouTube, Maps, machine learning, hardware and the Google Play Store. (See also: 7 Reasons Why Alphabet Will Dominate.)