Healthcare payments tech company Waystar plans to go public. Is the IPO freeze thawing?

Healthcare payment software maker Waystar filed for an initial public offering, signaling a potential end to the dry spell in the health tech IPO market.

Reuters reported in August that the company, formed in 2017 by the merger of revenue cycle management companies Navicure and ZirMed, was eyeing an IPO that could value it at up to $8 billion. Waystar confidentially filed for an IPO later in August, Reuters reported.

The company intends to list its common stock on the Nasdaq under the symbol "WAY." It did not announce the pricing nor the number of shares on offer.

The company, renamed Waystar in February 2018, provides revenue cycle management software-as-a-service designed to improve and streamline billing, claims and patient payment processes. Waystar says its software helps providers get paid faster, more accurately and more efficiently while ensuring patients receive a modern, transparent and consumer-friendly financial experience.

The company serves more than 30,000 customers and facilitated more than $4 billion in healthcare payment transactions last year, according to an S-1 filing with the U.S. Securities and Exchange Commission.

The company reported growing revenue and shrinking losses for 2022. Waystar brought in $705 million in revenue for the year ended December 2022 and a net loss of $44 million, compared with a loss of $47 million on revenue of $579 million the previous year. Waystar says it has a 110% net revenue retention rate.

For the six months ended June 30, Waystar generated revenue of $387 million, up 12% from $345 million for the same period in the prior year, and its net loss narrowed from $25 million a year ago to a net loss of $21.4 million during the most recent quarter.

In 2019, Swedish global investment firm EQT Partners and the Canadian Pension Plan Investment Board bought a majority stake in Waystar, valuing the healthcare technology company at $2.7 billion. Bain Capital retained a minority stake in the company.

Also in 2019, the company went on an acquisition spree, buying several analytics solutions providers including Connance, Ovation Revenue Cycle Services' transaction services tech, PARO and Digitize.AI, a company that applies artificial intelligence to the prior authorization process. 

The IPO offering is being led by J.P. Morgan Securities LLC, Goldman Sachs & Co. and Barclays Capital.

The macroeconomic environment effectively put a freeze on the IPO market for health tech companies during the past three years. There were 20 digital health companies that went public in 2021 and only two in 2022. There have been zero digital health IPOs in 2023 so far.