On Friday Castlight Health debuted on the New York Stock Exchange with an IPO that raised about $180 million for the company, much more than it had previously estimated in SEC filings. The company's stock then ramped up more than 160 percent during the day and closed at a price that valued the company -- which only had $13 million in revenues last year, at more than $3 billion.
Following the company's NYSE debut Friday, MobiHealthNews had the chance to catch up with Castlight's Chief Medical Officer and Head of Products Dr. Dena Bravata who discussed the timing of the company's IPO and advice for other private digital health companies looking to follow Castlight's lead.
Bravata said that the urgency of the problem Castlight is trying to solve is what ultimately drove it to IPO.
"[The timing of our IPO] has everything to do with the nature of the problem we are trying to solve," she said. "US enterprises are spending more than $620 billion a year and about a third of that is wasted. We talk to a lot of enterprises and their CFOs often say that healthcare costs is really their top concern. Even revenue growth is often placed second to healthcare costs. What we have seen -- because Castlight is uniquely positioned to help drive down some of that waste -- there has been this enormous enthusiasm on the part of these enterprises around the country to adopt our technology platform."
While Castlight did only bank $13 million in revenues last year, it has around $100 million in contracts with customers.
Bravata describes Castlight's offering as"the first enterprise healthcare cloud" that offers employers and their employees and families tools about healthcare pricing, quality, and other kinds of "convenience information" that help patients make well-informed decisions. She said that next steps for the offering include "natural extensions" of where Castlight is already.
"Today we provide robust information to patients so that they can make decisions about medical costs," she said. "We have augmented that now with a number of other modules. For example, the ability to provide pharmacy-based information, incentives, rewards, and other types of benefits design. It is a little hard for me to predict the future, but we are certainly working on all the natural extensions to be able to provide more and more robust information in those domains and in related ones."
Bravata chalks Castlight's success so far up to its team, which is made up of a mix of people with backgrounds in technology, healthcare, and consumer companies. Other digital health companies should consider the makeup of their teams, too.
"That has been a key part of our success," Bravata said. "We have been able to bring together people from very different backgrounds to be able to solve a problem that is highly complicated and requires that kind of heterogeneous expertise."
Bravata also suggested that Castlight's singular focus has been core to its success.
"The other part of that picture is that all of us are working with a single-minded focus," she said. "There are other companies working on a number of avenues. One of Castlight's strengths is that we have really been focused on serving our enterprise customers' needs. Castlight's mission has been to dramatically improve the efficiency of the US healthcare system for employers, employees and their families. For the first time with Castlight, employers now have a technology platform that gives them control over their healthcare spending and really helps them and their families to get the right care. That is where we are, and where we will continue to put our efforts."