GoHealth saw its shares jump Wednesday on the heels of a blockbuster initial public offering that raised $914 million.
The company's shares surged 23% on its first day of trading as a public company.
It's the largest healthcare IPO so far in 2020. GoHealth, a Medicare-focused health insurance marketplace, joins a growing list of technology-enabled healthcare companies that are testing the public markets. Accolade raised $220 million in its public debut July 2, and One Medical brought in a $245 million IPO haul in January.
Livongo, Phreesia, Health Catalyst, Change Healthcare and Progyny all went public last year.
The $914 million in proceeds generated from the GoHealth IPO ranks among the highest of the year, according to Investors.com. Royalty Pharma raised $2.2 billion, Warner Music Group raised $1.9 billion, Dun & Bradstreet raised $1.7 billion and Zoom Infotech raised $935 million. Those IPO stocks all became public last month.
Speaking with Fierce Healthcare on GoHealth's first trading day, Brandon Cruz, co-founder and chief strategy officer, said he felt "kind of strangely relieved and stressed at the same time."
RELATED: Health insurance marketplace GoHealth files to go public
"We, meaning the whole team, worked hard to get this across the goal line. At the same time, this is day one as a public company. Our mission is to improve access to healthcare, and we've got a long way to go," he said.
GoHealth has been around for 20 years and operates a health insurance portal offering a variety of plans that allows customers to compare numerous insurance options such as family health plans and self-employed insurance.
The company works with more than 300 health insurance carriers and has enrolled more than 5 million people into health plans.
The online health insurance marketplace expanded the size of its U.S. IPO and priced the shares above the marketed range. The company sold 43.5 million shares for $21 each.
RELATED: Accolade raises $220M in its IPO, and stock surges on first day of trading
GoHealth had marketed 39.5 million shares for $18 to $20 each, according to its filings with the U.S. Securities and Exchange Commission.
GoHealth said its stock will trade on the Nasdaq Global Market under the ticker symbol "GOCO," according to a press release.
The company intends to hire with its new funds, including 1,000 more licensed insurance agents.
Goldman Sachs, BofA Securities and Morgan Stanley are acting as the managing book runners for the proposed offering. Barclays, Credit Suisse, Evercore ISI, RBC Capital Markets and William Blair are acting as book runners for the proposed offering. Cantor, SunTrust Robinson Humphrey and Loop Capital Markets are acting as co-managers for the proposed offering, according to a GoHealth press release.
The underwriters will also have a 30-day option to purchase up to an additional 6.5 million shares of Class A common stock at the IPO price, less the underwriting discount.
The company has shifted its focus toward Medicare products over the past four years, positioning itself to capitalize on strong demographic trends and an aging population.
The market is "ripe for disruption" by digitally enabled and technology-driven marketplaces like the GoHealth platform, according to the company.
For many consumers, Medicare is confusing and difficult. GoHealth simplifies this process by providing consumers with a high-touch, advisory experience to help them choose the right combination of plan and ancillary subsidies and benefits that best meet the member’s unique needs, the company said.
The company uses machine learning algorithms and insurance behavioral data to match customers with the health insurance plan that meets their specific needs.
"We want to be the go-to trusted adviser for everything healthcare-related," Cruz said.
GoHealth has seen strong growth, and the time was ripe for the company to go public, Cruz said, noting that the company's financial roadshow was conducted entirely through virtual meetings.
RELATED: One Medical raises $245M in its IPO and stock jumps on first day of trading
"Obviously a few months ago, it was not a good time with the volatility in the market. But the market opened back up. We want to get the brand out there as a consumer brand, and being a public company strengthens the brand message. This will also help fuel more organic growth. We feel good about the company's growth, our plans and our balance sheet," he said.
In September 2019, Centerbridge acquired a majority stake of GoHealth in a deal that reportedly valued the company at $1.5 billion, the Chicago Tribune reported.
Net revenues grew to $141 million for the first quarter of this year, up 104% compared to $69.1 million last year. The company reported 2019 pro forma net revenues of $540 million, up 139% from 2018's revenue of $226 million, the company reported in its SEC filing.
The company reported a net loss of $937,000 for the first quarter of 2020 compared to a net income of $5 million for the same period in 2019.