Livongo Health, a US-based health management technology developer backed by corporates including pharmaceutical firm Merck & Co and care provider Humana, went public yesterday in an initial public offering sized at more than $355m.
The IPO consisted of approximately 12.7 million shares priced at $28 each, signficantly above the $20 to $23 range it had set, with the number of shares also increased from 10.7 million. Livongo’s shares peaked at $45.46 before closing at $38.10 on the Nasdaq Global Select Market yesterday, giving it a market cap of $3.39bn.
Founded in 2014, Livongo helps patients living with a chronic condition to manage their health through a data-driven platform that relies on smart devices and offers users personalised digital guidance and around-the-clock access to health professionals.
The company is targeting users dealing with diabetes, hypertension, weight management and behavioural health. It had raised $222m in funding ahead of its initial public offering.
The most recent funding received by Livongo involved a $105m round in April 2018 round that featured Merck’s Global Health Innovation (GHI) fund and M12, the corporate venture capital subsidiary of software producer Microsoft.
Zaffre Investments, an investment vehicle for health insurance provider Blue Cross Blue Shield of Massachusetts, also backed the round, as did Echo Health Ventures, which was formed by healthcare provider Cambia Health and health insurer Blue Cross and Blue Shield of North Carolina.
The round was co-led by General Catalyst and Kinnevik, and additionally featured DFJ, Kleiner Perkins Caufield & Byers (KPCB), Sapphire Ventures and 7wire Ventures.
General Catalyst and Kinnevik had already co-led a $52.5m round for Livongo in early 2017 that included M12, Merck GHI, American Investment Holdings, Singaporean government-owned investment vehicle EDBI and all of Livongo’s existing shareholders.
Zaffre, Merck GHI, Humana and automotive components manufacturer Wanxiang America Corporation had contributed to the company’s $44.5m series C round in 2016 together with Cowen Private Investments, Sapphire Ventures, General Catalyst, KPCB, DFJ and 7wire Ventures.
Merck GHI’s stake in Livongo has been diluted from 7.6% to 6.6%, while General Catalyst remains its largest shareholder with 21.9% post-offering. Kinnevik retains a 10.4% stake post-IPO while KPCB now holds 7.7% and 7wire Ventures owns 6.1%.
Morgan Stanley, Goldman Sachs and JP Morgan Securities are lead joint book-running managers for the offering, while Piper Jaffray and SVB Leerink are lead co-managers.
Canaccord Genuity, KeyBanc Capital Markets and Needham & Company are co-managers for the IPO. The underwriters have the 30-day option to buy up to 1.9 million more shares, taking the size of the offering to more than $408m.
