Bswift L.L.C., a health care benefits software firm, has received $51 million from a private equity fund to keep up with torrid growth.

The Chicago-based company has been growing at more than 40% annually for the past four years and is enjoying a surge in demand, in part because of the Patient Protection and Affordable Care Act. Bswift's technology is used by companies to provide comparison shopping, enrollment and administration of health insurance benefits. It also operates insurance exchanges for private and public markets.

“We thrived as a bootstrapped organization for 15 years,” said CEO Rich Gallun. “We realized there's a massive opportunity for us in benefits technology and private exchanges.”

Boston-based Great Hill Partners provided the investment. Bswift previously had raised less than $10 million from strategic partners, friends and family. Great Hill also backed Evanston, Ill.-based Legacy.com, an online obituary company.

Bswift's business is exploding. Headcount at the firm, which is based in Chicago's West Loop, has soared to more than 300 from 165 a year ago. A year ago, the company had expected to hire 100 people over three years.

“We've added 45 people since the beginning of the year,” Mr. Gallun said. “We'll be over 400 by the end of the year.”

About two-thirds of Bswift's business comes from working with companies and large organizations, such as Ulta Salon, Cosmetics and Fragrance Inc., Cheesecake Factory and Lurie Children's Hospital. But it also provides its technology to insurance carriers, brokerage firms and payroll-service providers — a business that's growing fast.

“The arms race for technology has become really intense,” Mr. Gallun said. “It's become really complex and requires a lot of investment in everything from mobile to security. The shopping experience is important, but difficult, as Healthcare.gov showed. The bar for our business continues to rise in all these areas.”

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Like GoHealth, which provides comparison-shopping for health insurance to consumers, Bswift ramped up staff to cope with demand around the Affordable Care Act.

“What we've learned in having so much growth is the need to staff up well in advance,” Mr. Gallun said.

Large companies, such as Deerfield-based Walgreen Co., are looking to private health care exchanges to save money — and hassles — in providing health coverage.

“There's tremendous interest in private exchanges,” said Larry Boress, CEO of the Midwest Business Group on Health, which advises large employers, such as Boeing Co., Kraft Foods Group Inc. and the City of Chicago, on health benefits. It set up the Private Exchange Evaluation Collaborative as an independent adviser on health exchanges.

The group predicts up to half of all employers will look seriously at using exchanges over the next two years. “Whether they go into it is whole different story,” Mr. Boress said.

The $51 million raised by Bswift is one of the largest recent investments in a Chicago-area company. Others include Roselle, Ill.-based Network Merchants, a credit card technology provider that raised $100 million a year ago. Mu Sigma Inc., a data-analytics firm based in Northbrook, Ill., raised $108 million in 2012.

In addition to increased interest in health care technology, Bswift also is benefiting from intense investor demand for companies that provide back-end software for necessary tasks such as payroll on a pay-as-you-go basis. Arlington Heights, Ill.-based Paylocity Holding Corp., a 17-year-old company, went public March 19 and saw its stock rise 41%.

John Pletz writes for Crain's Chicago Business, a sister publication of Business Insurance.