It's been a while since the digital health space has seen an IPO. But that's about to change, according to The Wall Street Journal, which reports that chronic disease management startup Livongo Health is planning to go public this year.
According to the Journal, the company has hired Morgan Stanley, Goldman Sachs and JPMorgan Chase as underwriters, and is looking towards a valuation over $1 billion.
MobiHealthNews asked Livongo CEO Glen Tullman about IPO plans in April of last year, when the startup raised its latest $105 million round. Tullman was coy, but didn't deny the possibility.
"Clearly I’ve taken two different companies public before, I’ve run three public companies, and done a lot of private companies," Tullman said at the time. "I think what you want to do is build a great company and have optionality so you can do whatever you want to do. There’s lots of interest, but right now we’re focused 100 percent on building a worldclass product that does three things: That our members love, that delivers results for them — measurable, clinical results — and lastly that saves money and reduces the overall cost of healthcare. We’re doing all three right now and if we keep doing that everything else will take care of itself and we’ll have all the options in the world."
Asked by email about the WSJ report, John Hallock, VP of corporate communications at Livongo, said "We don’t comment publicly on Livingo’s future financing plans."
Why it matters
With more than $200 million in funding, Livongo has been considered a rising star of the digital health world almost from the beginning, thanks in part to Tullman's background as former CEO of Allscripts. Since its launch five years ago, the company has branched out from diabetes into hypertension and weight management and recently acquired MyStrength in order to add mental and behavioral health services into the mix.
The company has a lot of room for growth, as it plans to work toward being a comprehensive chronic care management solution in an industry that's grown tired of point solutions, according to Tullman.
“Our view at Livongo was to say, you can’t be in just one chronic condition. We have to address all of them. Because what was happening to the actual members is members said with all this new technology, [patients] were saying ‘It’s not getting better; it’s getting more confusing and more complex,’” Tullman said around the time of the MyStrength acquisition. “People said ‘What we want is one place to go, one app, one coach. Make our lives easier, not harder.’”
Among other things, a Livongo IPO would necessarily lead to greater transparency for the company, giving those who analyze the industry an additional window into digital chronic condition management's profitability or lack thereof.
What's the trend
The field is notoriously hard to define consistently, but by MobiHealthNews's reckoning digital health has seen only a small handful of IPOs over the years, and hasn't seen one since iRhythm went public in 2016. Other digital health companies that have gone public include Castlight, Teladoc, Fitbit, NantHealth and Senseonics. Other companies of course, such as Apple or Dexcom, have moved into digital health while already being public.