Todd Park Source: HHS.gov

The team behind Castlight Health and Athenahealth, both public companies in health-tech, are onto their next billion-dollar venture. Devoted Health, a health insurance start-up targeting seniors, is now valued at $1.8 billion, people familiar with the matter told CNBC, after raising $300 million in fresh capital earlier this week. The sources asked not to be named because the valuation wasn't disclosed. Todd and Ed Park, brothers and serial health-tech entrepreneurs, founded Devoted last year, jumping into the market for Medicare Advantage (MA) plans, which provide coverage for people over age 65. It's a lucrative opportunity for business, because baby boomers are aging into Medicare, and people who use MA receive benefits through private health plans but with big government payouts to the insurers — about $10,000 on average per member.

"if we can keep people healthier, it's better for the patient and the wallet," wrote Vijay Pande, a partner at venture firm Andreessen Horowitz, in a blog post. Pande led the latest funding round. A spokesperson for Devoted Health declined to comment on the valuation. Devoted's big raise — and its valuation — is to be expected given the background of the team and the capital requirements for any new insurance business. The Park brothers previously helped build Athenahealth and Todd co-founded Castlight, where Ed also sits on the board. But it also reflects the fact that Devoted is in a hot space that's attracting investor attention. Bright Health has raised $240 million from a number of venture capital firms, and Oscar Health recently netted $375 million from Alphabet to expand into new business segments, including MA.

Big checks are needed