Accolade will take its health benefits navigation business to public investor markets

The timing and pricing of the Seattle company's IPO is yet to be determined.
By Dave Muoio
03:19 pm
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Health-benefits navigation platform Accolade announced on Friday the filing of its S-1 with the US Securities and Exchange Commission, making it the next digital-health company in line to join the public markets.

Accolade has set a $100 million maximum aggregate offering price to calculate its registration fee, but has not yet locked down the price and volume of its share offering.

The Seattle-based company will be listing on the Nasdaq Global Select Market, and has tapped Goldman Sachs, Morgan Stanley and BofA Securities as its lead book-running managers.

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Accolade’s platform seeks to increase health-plan and employer-benefits engagement while helping members understand their care options. The company also has a population health offering that includes personalized clinical-team support and insights generation.

“Our approach results in real, measurable, actuarially validated savings for our customers, starting with average savings of approximately 4% of total employer healthcare spend during a customer's first year and often increasing to more than 10% per year for our more tenured customers, amounts significantly higher than the fee we charge our employer customers,” the company wrote in its S-1.

WHY IT MATTERS

In addition to signaling Accolade’s upcoming offering, this filing also offers a look at the benefits-navigation business’s recent performance.

The benefits-navigation platform counted $94.8 million in revenue for the year ending in February 2019, representing 23% year-over-year growth. However, net losses during the same two fiscal years were $61.3 million (ending in 2018) and $56.5 million (ending in 2019).

For the nine-month period between March and November 2019, the company brought in $88.1 million. Net loss during that time was $49.2 million. As of the end of November, its accumulated deficit was $318.7 million.

Looking a bit more broadly, Accolade wrote in the S-1 that it foresees “the total addressable market for our current solutions to be approximately 24 billion.” A push into fully insured employers could add another $1.7 billion in opportunity, the company continued, while government-sponsored programs open up another $10.7 billion.

THE LARGER TREND

After something of a digital-health IPO lull, 2019 saw Livongo, Phreesia and others make their bids to public investors. 2020 seems to be maintaining the momentum with offerings from One Medical and now Accolade.

Prior to this time, the company had seen plenty of activity from private investors. Its roughly 13-year equity haul placed the company at a total raise of just under $240 million, with recent investments comprising a $20 million injection from Humana in October, a $50 million Series F in early 2018 and a $70 million Series E in the summer of 2016.

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