The insurance technology startup filed preliminary paperwork for an initial public offering with the Securities and Exchange Commission Wednesday, which shows it has set its maximum aggregate offering price at $100 million — though that is likely a placeholder figure until the company prices its shares.
Bright Health will apply to trade on the New York Stock Exchange under the symbol “BHG”.
Rumors of an IPO filing have followed the Minneapolis-based company since early April when Bloomberg reported its plans to raise $1 billion through a public offering to be launched in the second quarter of 2021.
Co-founded in 2015 by former UnitedHealth Group CEO Bob Sheehy, Bright Health is a part of the burgeoning insurtech market, which includes payers that leverage technology with the aim of improving member experience and engagement. Bright Health provides individual, family, small business and Medicare Advantage plans and works with local healthcare entities to develop and manage provider networks. Further, it offers an IT platform that can be used to track healthcare costs.
Bright Health serves approximately 623,000 consumers, including around 515,000 commercial and 108,000 Medicare Advantage members. This is on par with Oscar Health, which had around 529,000 members as of Jan. 31, and higher than Alignment Healthcare, another insurtech startup that recently went public, which touts about 83,000 members.
These numbers pale in comparison to the major payers dominating the U.S. healthcare industry, including UnitedHealthcare with around 70 million members and Anthem with approximately 39 million. But insurtech companies are betting on their advanced technology offerings and consumer mindset to set them apart.
Bright Health generated over $1.2 billion in total revenue in 2020, a huge jump from the $280 million in revenue the company reported in 2019. But concurrently, its net loss nearly doubled to $248 million in 2020 from $125 million the year prior.
In the first quarter of 2021, Bright Health recorded a $21 million net loss on $874 million in total revenues recorded.
The company disclosed in its IPO filing that it had incurred net losses annually since its inception, and its losses have grown.
“We must generate and sustain higher revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our profitability,” the filing states.
The move to go public comes about two months after Bright Health acquired Zipnosis, a telehealth platform provider. This marks the company’s foray into telehealth, a move that has become increasingly popular among payers as virtual care use exploded amid the Covid-19 pandemic. From bigger entities like Cigna purchasing telehealth company MDLive to Oscar health rolling out its virtual primary care service, payers appear to be eager to capture market share in the telehealth arena — and insurtech companies may even have a competitive advantage.
With funding support from the likes of Tiger Global Management and Blackstone, Bright Health has raised more than $1.5 billion in funding. It has its growth strategies mapped out, listing several in the filing, including its plan to participate in direct-to-government programs like the Centers for Medicare & Medicaid Services’ Geographic Direct Contracting Model.
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