Diabetes-training startup Livongo documents to go public in a take a look at for fitness tech

Livongo, a startup that video display units and coaches sufferers with chronic illnesses, on Friday filed papers to launch its preliminary public offering, in what’s seen as a litmus take a look at for health-tech companies looking to translate early growth into stock in the public markets.

The supply is expected to be most of the first for a new generation of slick and savvy project-subsidized companies within the U.S. Virtual health quarter, which hasn’t produced an IPO since 2016. (Another such agency, scientific records information startup Health Catalyst, filed to move public on Thursday.) Longo’s offering has been expected for several months. The business enterprise has been increasing rapidly and researching to reveal that its services can improve patients’ outcomes and save their employers’ money. Livongo delivered $68 million in revenue last year, greater than double its haul in 2017, and is well on track to eclipse that figure this 12 months, after a first quarter in which it delivered $32 million, in keeping with thecompany’sfilingng filing with the Securities and Exchange Commission.

But Livongo is likewise losing money: It published a net loss of $33 million last year and lost every other $15 million within the first 3 months of this year. The enterprise, which has its biggest workplaces in Silicon Valley and Chicago and employs more than seven hundred people, makes the maximum of its money by charging self-insured employers to provide its monitoring and coaching services to their employees with chronic illnesses. It reached a total of 679 customers at the end of March, in step with the SEC filing; some of the most important are Microsoft, Merck, and Delta Air Lines. Livongo additionally counts a handful of health plans and hospitals amongst its clients.

The business enterprise’s maximum critical commercial enterprise is diabetes — more than 164,000 patients are enrolled. It’s made up approximately ninety percent of its revenue, although, in recent months, Livongo has rolled out applications for high blood pressure, weight control, and behavioral fitness. Employers typically pay the business enterprise a rate of $75 according to month for personnel who are actively using Livongo’s diabetes program, and patients themselves don’t pay whatever out of pocket. When the personnel of Livongo’s customers sign up for the agency’s diabetes software, they get a clever blood-glucose meter, and checking strips are sent in the mail.

When sufferers sample their blood and run it through tthroughthe gadget, the one’s records get beamed back to Livongo. In turn, the corporation uses gadget learning algorithms to provide patients with customized tips and messages that display on the display of the blood glucose meter. Livongo also employs a small army of fitness coaches who name patients properly away while their blood sugar readings come in too high or too low. In its SEC filing, the company states that it saves over $1,900 a year in gross clinical costs for diabetes patients, as well as 7% weight loss for sufferers suffering from weight problems. But key questions continue to be, which include whether its effects will hold up over a long time and produce value for patients and employers, and whether buyers may be convinced of its commercial enterprise version’s sturdiness.

It also faces lots of opposition, particularly in diabetes care, its biggest source of business. Companies consisting of Omada Health, Virtua Health, and Glooko also aim to reveal or instruct those sufferers. Longo’s SEC filing offers insight into how it’s faring as it takes on some of the sharp challenges for organizations in the region. When a patron signs up to offer its personnel or protected sufferers with diabetes access to Livongo’s service, no longer every person who’s eligible signs up. On average, the best 34% of them pick to enroll within a year, consistent with the filing. And the one’s sufferers who do determine to enroll in Livongo’s diabetes application have interaction with it at one-of-a-kind rates. On average, they log over 250 interactions with Livongo a year, the filing stated. Livongo hired Morgan Stanley, Goldman Sachs, and JPMorgan Chase & Co. to underwrite the deliberate IPO. Citing a supply acquainted with the deliberate offering, Business Insider mentioned that the enterprise might be valued as high as $2.5 billion.