On prime of the continuing Covid-19 pandemic, 2020 has been punctuated by devastation: raging wildfires, document unemployment and rising inequality. However regardless of all of this, a stream of healthcare know-how firms proceed to go public.
Even after the historic market crash in March, a number of well being tech firms discovered an IPO window this summer time. A lot of them have been ripe for his or her debut: that they had been round for a decade or longer, had revenues above $100,000 and had skilled leaders on the helm, mentioned Omers Ventures Managing Companion Michael Yang.
To this point, six corporations have gone public in 2020. They embrace:
All however GoHealth have seen their inventory improve since going public.
Final yr, which some buyers known as the “yr of the digital well being IPO,” 5 digital well being firms went public. Livongo, particularly, is performing properly:
“Final yr Uber and Lyft went public too. Tech IPOs began to occur en masse. That has continued this yr,” Yang mentioned. “Plenty of these well being tech enterprise have been Covid-advantaged, frankly. Is that their new baseline of working or does that revert to the imply?”
A number of extra firms have filed for an IPO or are rumored to be planning one. However the window to go public this yr will shut quickly, because the election shortly approaches.
GoodRx, a startup that negotiates with pharmacy advantages managers for customers to entry prescription reductions, just lately priced its IPO between $24 and $28 per share. Notably, it’s one of many few companies to go public this year that is turning a profit.
Direct-to-consumer telemedicine firm Hims & Hers is reportedly in talks to go public by way of a merger with blank-check acquisition firm Oaktree Acquisition Corp, according to Bloomberg. And the CEO of telehealth startup MDLive has also hinted at plans to go public early subsequent yr.
“It’s actually a few enterprise goal,” CEO and Chairman Charles Jones mentioned in a telephone interview. “Whether or not we use funding from an IPO or a personal placement, our objective is to make use of our platform for a discount in value whereas rising the supply of healthcare.”
The corporate recently closed a $50 million crossover equity investment from Sixth Road Progress. Jones mentioned the seek for development in a recession has made digital well being enticing to buyers, together with the challenges to the present healthcare system highlighted by the novel coronavirus.
“We will’t proceed the speed of development of healthcare supply that we’ve skilled within the final 10 years. That’s why you’re seeing a lot investor curiosity,” he mentioned. “Now we have 5 banks in our syndicate and all we get is encouragement to proceed.”
Extra to come back
As telehealth firms acquire extra customers, and digital well being startups strike partnerships with insurers, the section appears to be rising up.
On prime of that, excessive deductible well being plans and rising healthcare costs are pushing sufferers to buy round extra for care — once they can — resulting in the rise of startups like GoodRx.
“Employers… they’ve began interested by the way to bend the associated fee curve whereas enhancing the buyer expertise,” mentioned Hemant Taneja, a managing director with Common Catalyst. “Livongo, which we in-built our workplace within the early days, was primarily based on that premise.”
Since Teladoc introduced its plans to amass Livongo in a deal that would value the company at $18.5 billion, extra digital well being mergers are more likely to comply with. Although Taneja wouldn’t touch upon the phrases of the deal, he mentioned having a platform that covers each major care and persistent care is an “thrilling place to be when it comes to a digital care supplier.”
Taneja expects to see extra mergers within the subsequent yr, in addition to extra firms making the leap to go public.
“I do suppose there’s a collection of firms that may and possibly needs to be public firms within the 12,14, 18 months” he mentioned. “It’s a mirrored image of the truth that this sector has grow to be extraordinarily attention-grabbing.”
In the long run, each Yang and Taneja see a necessity for extra house care options and applied sciences that might permit for aging-in-place.
“Covid has proven large elements of the healthcare system that aren’t resilient,” Taneja mentioned. “That’s truly led to quite a lot of give attention to investing and shoring up these elements of the healthcare system.”
Picture credit score: zoom-zoom, Getty Pictures