Health benefits platform Accolade made its debut on the public market Thursday and opened trading about 59% above its set price.
Accolade set the pricing of its initial public offering of 10 million shares of its common stock at a price of $22 per share, above the expected range of $19 to $21. The company raised $220 million at a valuation of $1.2 billion in its debut on the Nasdaq. Accolade is trading under the symbol "ACCD."
The company opened trading at $35, nearly 60% higher than its IPO price.
Founded in 2007, Accolade provides a health benefits platform for employers aimed at improving health outcomes and controlling costs by helping consumers make better, data-driven decisions.
The Seattle-based company uses machine learning, artificial intelligence and mobile apps to help employees navigate their health benefits and access care.
"We’re changing the way healthcare works in this country," said Accolade CEO Rajeev Singh in a recorded message for the ceremonial ringing of the opening bell, broadcast in New York’s Times Square.
Accolade works with 58 corporate customers across media, technology, financial services, transportation, energy and retail, comprising 1.7 million members.
The company brought in $133 million in revenue for its 2020 fiscal year, according to filing with the U.S. Securities and Exchange Commission. Accolade's revenue grew 40% year over year from February 2019.
But the company has sizable net losses—$51 million in fiscal year 2020. It was an improvement from losses of $56 million in 2019.
Accolade says its four largest corporate customers (Comcast Cable, American Airlines, Lowe’s and State Farm) were responsible for 59% of its revenue of $132.5 million for its 2020 fiscal year, which ended in February. Its largest customer, Comcast, was responsible for nearly a quarter of its 2020 revenue.
The company estimates its total addressable market for its current solutions to be approximately $24 billion, with its core market currently comprised of self-insured employers, inclusive of state and local governments and unions. The company sees the self-insured employer sector alone representing at least an $11.7 billion addressable market.
Co-founders Michael Cline and Tom Spann launched the company 13 years ago to improve the healthcare experience for patients, said Singh, former president and co-founder of travel expense software company Concur.
They “said aloud something that most people in this country wholeheartedly agree with: healthcare in this country is fundamentally broken. What made them different, like all great entrepreneurs, is that they set out to do something about it," he said.
Accolade focused on providing what Singh called "personalized healthcare advocacy."
"We set out to be one place people can come with any healthcare question to get the right answer the first time," he said, noting that this can range from helping patients find a specialist in-network to disputing a medical claim to evaluating health plan options.
The challenges Accolade was founded to address have only increased by the COVID-19 crisis, Singh said.
"While the full effects of COVID-19 on the prospects of Accolade's business are not yet known, we do know that we have served as a critical resource to our members during this difficult time," the company said in its S-1 filing.
As of early June, the company had reached more than 400,000 members with educational resources focused on COVID-19 prevention, assisted more than 25,000 with COVID-19-specific concerns and clinically assessed approximately 2,000 for infection, ultimately directing them toward the most appropriate course of care.
"We believe our value proposition now resonates with an even broader audience of employers as they turn their focus to safely reopening their workplaces and managing the ongoing health and well-being of employees and their families," the company said.
The company recently rolled out a back-to-work solution that allows employers to use Accolade's platform to support employee education, testing, care plans, contact tracing and return-to-work clearance.
Current disruptions to traditional care consumption have reinforced the need for navigation services, the company said. This, along with projected spikes in healthcare costs, could increase demand for Accolade's services.
Accolade filed to go public in February before the COVID-19 outbreak hit the U.S. It joins a growing list of health technology companies that are testing the public markets, including Livongo, Phreesia, Health Catalyst, Change Healthcare and Progyny. Primary care company One Medical raised $245 million in its IPO when it started trading as a public company Jan. 31.
GoHealth, an online health insurance marketplace, recently filed to go public, looking to raise up to $100 million in an IPO.
Accolade has raised $237 million to date, with investors including Andreessen Horowitz, McKesson Ventures, Carrick Capital Partners and Madrona Venture Group, among others. In October, the company scored a $20 million investment from insurance giant Humana as part of an ongoing partnership.