One Medical sees early success on public markets

While the tech-enabled primary care provider set the initial pricing of its shares at $14 apiece, prices are climbing in the early hours of its IPO.
By Dave Muoio
01:31 pm
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Tech-enabled primary care business 1Life Healthcare — better known by its brand name, One Medical — hit the public market Friday after announcing the sale of 17.5 million shares at $14 each. This pricing alongside the roughly 122 million outstanding shares disclosed in the company’s S-1 would put One Medical’s valuation at just over $1.7 billion.

And although it’s only been on the market for a couple of trading days, investors appear to be interested in One Medical’s business. As of Monday February 3, the company’s stock is fluctuating between $22 and $24.50.

“Going public further affirms our human-centered, technology-powered model and our mission to transform health care at scale,” CEO, President and Chair of One Medical Amir Dan Rubin said in a statement. “Publicly raising funds will allow us to widen our reach and impact. It also creates an opportunity for a broader group of investors to participate in our vision to delight millions of members with better health and better care, while lowering costs.”

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One Medical is defined by its hybrid model of in-person and online primary care. Catering to employer programs as well as individuals, the company provides its members with 24-7 access to virtual health services, accommodates members regardless of which brick-and-mortar clinic they attend and will refer patients for specialty care as necessary.

According to the SEC documents filed earlier this year, One Medical has 72 primary care offices spread across the country. Individual patients can join the service for a yearly rate of $199 on top of their insurance, or employers can purchase the service for their members. In the filing, the company boasts of having around 397,000 members and 6,000 enterprise clients. 

Founded in 2007, the Californian company has roughly $532.1 million in funding, according to Crunchbase. The most recent raise consisteted of $350 million from The Carlyle Group

WHY IT MATTERS

2019 marked the return of the health tech IPO. Major names like chronic care management company Livongo, health data analytics company Health Catalyst and workflow management company Phreesia each went through the ringer and came out the other side with varying levels of success.

However, not too long after came WeWork’s disastrous IPO filing and subsequent withdrawal. Although the coworking startup’s business hardly falls within the realm of healthcare, enough investors were rattled to kick off a new wave of debate around the real and perceived value of tech and tech-adjacent startups.

Although it came in on the slightly lower side of its anticipated range, One Medical’s debut and sustained success will act as a barometer for confidence in the public digital health marketplace.

“Once you go public you are in it for the long haul,” Sean Day, a research analyst at Rock Health, told MobiHealthNews in an October interview discussing the 2019 IPOs. “I think the interesting questions are around how will public investors value these companies. At the moment a company like Livongo, they’re not a pure software company, they’re not a pure healthcare company. They’re an interesting new blend of scaling human providers and coaches to deliver care with technology.”

MARKET SNAPSHOT

Healthcare is continuing to see the growth and emergence of hybrid telehealth and brick-and-mortar clinics.

Take for instance Emilio Health, a pediatric behavioral health startup that recently announced new brick-and-mortar clinics with specialty services including occupational therapy and behavioral specialists. The startup is also incorporating a digital platform, which can be used to help track progress, schedule appointments and access teletherapy. 

Other examples include Carbon Health, which also delivers primary care in the Bay Area, and Kindbody, which brings a similar approach to women’s health.

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