Accolade, the US-based healthcare concierge developer backed by corporates Comcast, McKesson, Humana and Independence Health, went public yesterday in a $220m initial public offering on the Nasdaq Global Select Market.
The company increased the number of shares in the offering from 8.75 million to about 10 million and priced them at $22.00 each, above the $19 to $21 range it had set. Its shares opened at $35.00 yesterday and closed trading at $29.70, valuing it at about $1.4bn.
Founded in 2007, Accolade provides software that helps organisations guide their employees through the health insurance and benefits system. It increased revenue from $94.8m to $132m for the year ending February 2020, cutting net losses from $56.5m to $51.4m in the process.
The company’s earlier investors included Comcast International Capital, a now defunct subsidiary of mass media group Comcast, in addition to investment firm Accretive and private equity firms Carrick Capital Partners and Oak Hill Capital Partners.
Health insurer, Independence Health Group, had joined medical supplies provider McKesson’s corporate venturing arm, McKesson Ventures, to provide $22.5m for Accolade in 2015. Andreessen Horowitz, Madrona Venture Group and unnamed other investors added $70m the following year.
McKesson Ventures, Andreessen Horowitz, Carrick Capital Partners and Madrona Venture Group subsequently co-led a $50m round for the company in April 2018 that included Cross Creek Advisors and Madera Technology Partners.
Health insurance firm Humana invested $20m in Accolade in October 2019 in connection with a strategic partnership agreement to increase its overall equity and debt financing to $194m.
Comcast Ventures’ 7% stake was diluted to 5.5% in the offering. Accolade’s largest shareholder, Accretive, same out with a 21.4% share while Andreessen Horowitz owns 11.4% and Carrick Capital 7.4%.
Goldman Sachs, Morgan Stanley and BofA Securities are joint book-running managers for the IPO while Piper Sandler, Credit Suisse and William Blair are book-running managers and Baird and SVB Leerink co-managers.
The underwriters have 30 days to buy just over 1.5 million more shares if they choose, potentially bumping the size of the offering up to more than $253m.
