US-based digital health insurance provider Oscar Health is going public today in a $1.44bn initial public offering that will represent an exit for internet technology group Alphabet and insurer Ping An.
The offering will consist of approximately 37 million shares issued on the New York Stock Exchange priced at $39.00 each, approximately 650,000 of which are being divested by Oscar’s shareholders.
The amount of shares was increased from 31 million and the price was above the $32 to $34m range set by the company.
Founded in 2012, Oscar operates a health insurance platform with 529,000 members that helps its customers navigate the healthcare system while using data technology to help promote healthy personal behaviour. Its net loss increased from $261m to $407 in 2020, though its revenue rose more than 60% year on year to $1.67bn.
The offering follows some $1.67bn in funding for Oscar, which most recently pulled in $140m through a December 2020 round led by hedge fund manager Tiger Global Management and backed by Dragoneer Investment Group, Baillie Gifford, Coatue, Founders Fund, Khosla Ventures, Lakestar and Reinvent.
Alphabet had joined General Catalyst, Khosla Ventures, Lakestar, Thrive Capital, Baillie Gifford and Coatue in a $225m round for the company six months earlier, having paid $375m for a 10% stake in August 2018.
Oscar had raised $165m in March the same year, in a round led by Founders Fund that included Alphabet subsidiaries Capital G and Verily, investment and financial services group Fidelity, 8VC, General Catalyst, Khosla Ventures, Thrive Capital and unnamed others at a $3.2bn valuation.
The company had been valued at $2.7bn as of a $400m round in 2016 led Fidelity that also featured CapitalG (then Google Capital), Ping An, General Catalyst, Founders Fund, Lakestar, Khosla Ventures and Thrive Capital.
CapitalG had supplied $32.5m for the company in 2015 at a $1.75bn valuation, following earlier backing from Goldman Sachs, Founders Fund, Horizon Ventures, Wellington Management, 8VC predecessor Formation8, General Catalyst, Khosla Ventures, Thrive Capital and various individuals.
The selling shareholders all appear to be individuals, and Oscar’s shares are divided into 35.3 million class B shares, of which Thrive Capital holds 93%, and about 133 million class A shares.
Alphabet owned 18.1% of the class A shares pre-IPO, followed by Founders Fund (16.2%), General Catalyst (10.9%), Khosla Ventures (8.8%), Formation 8 (5.5%) and Fidelity (5.1%).
Goldman Sachs, Morgan Stanley and Allen & Company are lead managing bookrunners for the offering while Wells Fargo Securities is managing bookrunner. Credit Suisse and BofA Securities are also bookrunners, Cowen and LionTree co-managers and Ramirez & Co and Siebert Williams Shank junior co-managers.
The underwriters have 30 days to buy up to 5.56 million additional shares, which would hike the size of the offering to $1.66bn.
