Stock Market Sees Increase in IPOs From Digital Health Companies

2019 Is The Year Of The Digital Health IPO, But Will It Last?
– MedCity News

Manatt’s Lisa Suennen, leader of the firm’s digital and technology group, and the firm’s venture capital and emerging companies practice, spoke with MedCity News about digital health companies going public.

In the past two months, four digital health companies—Health Catalyst, Livongo Health, Phreesia and Change Healthcare—have gone public and collectively raised nearly $1.6 billion from their initial public offerings (IPOs), according to MedCity News. In addition, Peloton may launch its IPO before the end of 2019.

Those in the space said this sudden increase in IPOs could be due to the financial success of these companies at the intersection of health and tech, a sentiment echoed by Suennen.

“What we are actually seeing is what the market’s appetite is for things combined, health care technology and services that have significant revenue, which takes a very long time to achieve in health care,” Suennen said.

She also noted that digital health investors have been lenient with new companies that have yet to make a profit, such as Livongo Health and Phreesia.

“Companies have to eventually figure out how to be profitable; you can’t raise money forever, but right now it seems that is not what is bothering people — they are going to give them time to get there,” Suennen said.

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