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About a month after Oscar Health announced plans to raise up to $1.05 billion in its planned IPO, its rival Bright Health is reportedly making similar plans.
Bright Health plans to raise at least $1 billion in an IPO that will likely be launched in the second quarter of this year, unnamed sources told Bloomberg, which broke the news.
The company declined to confirm or deny the Bloomberg report, telling MedCity News via email that it does not comment on “rumor or speculation.”
Minneapolis-based Bright Health, one of the many insurance startups jostling for space in the market, could be valued at well above $10 billion, potentially even as high as $20 billion, Bloomberg reported. JPMorgan Chase & Co., Morgan Stanley and Barclays Plc are reportedly advising the company on the sale.
Co-founded in 2015 by former UnitedHealth Group CEO Bob Sheehy, Bright Health now operates in 13 states, providing individual, family, small business and Medicare Advantage plans. It works with local partners, including health systems, accountable care organizations and physician groups, to develop and manage provider networks. It also offers an IT platform that can be used to track healthcare costs.
Last September, the company closed a $500 million financing round led by Tiger Global Management, T Rowe Price and Blackstone. At the time, it said it planned to use the funds to expand into six new markets between Florida, North Carolina and Illinois. The company also said it would offer fully insured small business plans in Denver, Nebraska as well as Nashville and Memphis in Tennessee.
More recently, Bright Health announced record membership growth, reporting that it will provide health benefits coverage to over 500,000 consumers.
Further, the insurance startup has entered into an agreement to acquire Central Health Plan of California, Inc. Once the transaction closes, Bright Health will serve approximately 110,000 individuals within its Medicare Advantage business.
Bright Health’s growth is soaring, not unlike its peers. In addition to Oscar Health’s billion-dollar IPO announcement, insurance startup Sidecar Health, reached unicorn status after a $125 million Series C funding round and Alignment Healthcare launched its much-anticipated IPO, through which it aims to raise about half a million dollars.
Interest, and funding, in the insurance technology arena are clearly on the rise. Last year, annual insurtech funding hit an all-time high of $7.1 billion across 377 deals, representing a 12% increase in funding and a 20% increase in deals compared to 2019, according to a report by CB Insights.
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