One Medical’s $100M IPO sets the 2020 pace

One Medical last Friday
filed its Form S-1 with the US Securities Exchange Commission (SEC) and went down
in history as one of the first listings in the new decade.

One Medical was established in 2007 and operates primary care clinics
in nine locations across the United States. The firm is planning to raise about
$100 million through its IPO.

According to its filed prospectus, One Medical will list on Nasdaq
under the ticker “ONEM”. Its underwriters include Morgan Stanley and J.P. Morgan.

The numbers

One Medical
maintains a register of members who pay a yearly fee of $200, with a clientele drawn
from individuals and corporates.

The company
also generates its revenue through billing insurers and offering cash-only
options for uninsured patients.

According to its filed report, revenue jumped during the
first three quarters of 2019 to $198.9 million or by 29%. However, the
firm recorded an increase in losses from 2018. Its books indicate a 2019 (up to
September) loss of $33.1 million, up from the previous year’s $26 million.

About 60% of its revenue is consumed by care providing costs,
denoting a ballooning budget for hiring and retaining medics.

The tech-backed medical company will be making its debut on Nasdaq
at a time when several listed companies are struggling to remain afloat. Ride-hailing
unicorns Lyft and Uber are both barely growing their shareholders’ investments
since listing. Another digital healthcare entity called Livongo also listed
last in July and has been trading below its IPO.

One Medical operates 77 medical offices serving more than 397,000
members and is focused on adopting digital services, including virtual
consults, online scheduling, and fully electronic records. The firm is also
keen on carving a name for same-day appointments and developing an intuitive
mobile application to serves its thousands of users.

Having positioned itself as one of the silicon giants, One Medical
has previously managed to raise funds from Benchmark, Alphabet (formerly Google
ventures), and a few other ventures.

In October last year, CNBC reported that the medical firm was
planning to issue an IPO through its handlers, J.P Morgan and Morgan Stanley. A 2018 private
valuation of the company placed it at $1.5 billion.