For digital health, 2018 was a year marked by unprecedented levels of venture capital funding, continued consolidation, and big tech’s steady march onto the healthcare scene. We saw highly capitalized startups move to the forefront of healthcare — and big tech’s looming presence continues to pressure incumbents to embrace digital health. Based on these developments, our proprietary research, and the trends we're watching headed into the new year, here are our top five predictions for digital health in 2019:
1. At least one of these four companies will go public. There hasn’t been a digital health initial public offering (IPO) in the US since digital heart monitor manufacturer iRhythm went public in October 2016. This might be in part due to the nascence of the market — many digital health companies haven’t been around long enough to generate the revenue streams necessary to take their companies public. Now, we think digital health’s record funding in 2018 — alongside the maturation of digital health’s more established companies — will foster at least one IPO in 2019. Here are our top picks to end digital health’s IPO drought in 2019:
- Health Catalyst. Healthcare data analytics company Health Catalyst continues to grow as clients migrate to its cloud-based solution, and nearly 95% of Health Catalyst’s revenue is now recurring, according to Chilmark Research. Moreover, the company’s rejected mergers and acquisitions as a potential exit strategy, and has weighed an IPO since 2015, per MedCity News.
- One Medical. Tech-focused primary care disruptor One Medical raised $350 million in 2018 and announced expansion plans. Going public could help One Medical promote awareness of its network, recruiting patients away from traditional physicians.
- Change Healthcare. Change Healthcare — which provides software and analytics to health systems, payers, and pharmacies in the US — has reportedly been discussing going public since January 2018. An IPO could peg the company’s valuation at as high as $12 billion.
- Oscar Health. Like One Medical, health insurtech Oscar is taking on an entrenched, heavily concentrated industry, and could benefit from the increase in public awareness an IPO would bring. Moreover, Oscar health raised more than $500 million in 2018 and also announced plans to expand into the growing and stable Medicare Advantage <a [...]