Bright Health Group’s shares fell more than 5 per cent in their New York Stock Exchange (NYSE) debut on Thursday, valuing the Tiger Global and Blackstone Group Inc backed health insurance startup at $10.6 billion. Compared with the initial public offering price of $18 per share, Bright Health Group’s stock opened at $17. Bright Health had priced 51.3 million shares below its targeted price range of $20 to $23, raising $924.3 million.
“We are relentlessly focused on the consumer, and we want a high-performing care-delivery model,” Bright Health chief executive officer G Mike Mikan said in an interview on Thursday, according to Bloomberg.
Mikan said Bright Health is addressing a broader market than some other companies. “Our focus is really on serving all consumers. It’s very different than a lot of our other competitors who are focused on one part of the health care system,” he said.
Minneapolis-based Bright Health runs two businesses, NeueHealth and Bright HealthCare, through which it offers virtual and in-person clinical care to patients through affiliated primary care clinics. It also sells Medicare and commercial health insurance across 14 states in the United States.
Bright Health generated over $1.2 billion in revenue in 2020, underscoring a boom in the healthcare technology sector. The net losses of the company, co-founded in 2015 by UnitedHealth Group Inc’s former chief executive officer Bob Sheehy, nearly doubled to $248 million in 2020 from $125 million a year earlier, and it has been reporting losses since it was founded.
Bright Health raised $500 million in a late-stage funding round in September last year from investors such as Tiger Global Management, T Rowe Price Associates and Blackstone, bringing the total equity raised to more than $1.5 billion. JP Morgan, Goldman Sachs, Morgan Stanley and Barclays were the lead underwriters for the offering. Shares of Bright Health are trading on the New York Stock Exchange under the symbol BHG.
Bright Health’s listing comes as more people seek remote healthcare due to the coronavirus pandemic, supercharging the telemedicine market and prompting the companies to expand their scale.
(With agency inputs)