One Medical Raised Over $281 Million in Its IPO to Transform Healthcare

Primary care startup One Medical launched its IPO on January 31st, raising $245 million on only the first day on the Nasdaq, the final gross proceeds being approximately $281.8 million.

The company’s stock began trading on the Nasdaq as ONEM, at $14 per share, the lower margin of its initial $14 to $16 guidance.

Publicly raising funds will allow the company to widen reach and impact

Parent company 1Life Healthcare offered 17.5 million shares for its IPO, but underwriters had the option to buy another 2.62 million shares within the next month. On the first day, by market close, One Medical’s shares had already gone up to $22.

“Today we mark a milestone on One Medical’s journey to transform health care with our public listing on Nasdaq,” One Medical CEO Amir Dan Rubin said. “There is tremendous opportunity to serve consumers through our membership, but also employers, and increasingly we are serving more and more companies.” The San Francisco-based startup One Medical provides primary care services at a more affordable price. Patients pay about $200 per year for access to One Medical services through its offices in most major metropolitan areas, from Los Angeles to Boston. The company has also worked on bringing in corporate customers; it currently provides healthcare services to 6,000 employers, Rubin said.

The sum now obtained is slightly lower than that of previous funding rounds. In 2018, One Medical raised $350 million from private equity investor the Carlyle Group, raising the total value of the company to over $1 billion. As a private company, One Medical had raised over $530 million from investors including Alphabet’s GV, Benchmark, J.P. Morgan Asset Management, and Redmile Group.

Providing care to specific patient groups is the way to success 

One Medical is not the only company focusing on bringing affordable healthcare directly to patients. Through its online platform, Advantia Health currently provides direct care to women via more than 200 providers across 60 locations. Advantia employs 200 physicians and allied health professionals and more than 200 lactation consultants serving over 430,000 patients at its OB-GYN and coordinated specialist offices. Truvian Sciences has secured $27.1 million in a Series B financing to support the development of an automated benchtop system that provides lab-accurate results in 20 minutes for a full suite of health tests from a small sample of blood. Other companies, such as Medopad, use the money raised in financing rounds to fuel clinical studies, including digital biomarker discovery, creation of digital therapeutics (DTx), technology development, geographic expansion and commercial growth through strategic collaborations.

Affordable and accessible primary-care in nine markets

The San Francisco-based direct primary-care provider operates membership-based medical offices in nine major markets including San Francisco, New York, and Chicago. It focuses on making primary-care both affordable and accessible, with same-day appointments and permanent digital support through telehealth consultations.

The company also has a tech component: it built its own health record and practice management system, as well as a front-facing app that lets patients book appointments and contact their provider.

At the end of 2019, One Medical had a total of 422,000 members, a 22 percent increase from the previous year, according to an amended prospectus. The company’s total revenue was $227.4 million, up 30 percent from 2018. In early 2019, the company also opened six new offices.

However, as it pursued a rapid expansion trend, the company’s costs also grew significantly while it was preparing for the IPO, which implied a growing workforce, more salaries, and benefits. One Medical reported a net loss of $52.45 million.  This was an increase from its $45 million net loss last year. The company’s cost of care increased to $168.6 million, though it represented a slightly smaller chunk of One Medical’s overall revenue, at 61 percent.

One Medical follows other digital health companies that filed for IPOs

One Medical’s IPO compares to the IPOs of other recent digital health companies, such as Livongo, which provides data collection tools (blood sugar testing devices for people with diabetes, for example) to users, together with a platform that keeps track of the evolution, either good or bad, of their personal data and offers support or Phreesia, which gives healthcare organizations a suite of robust applications to manage the patient intake process.  Progyny, the fertility and family building benefits company that serves large, self-insured employers in the US, announced its Initial Public Offering of 10,000,000 shares of its common stock at a price of $13.00 per share, below the range of $14 to $16, becoming the first fertility benefits company to ever go public..

J.P. Morgan and Morgan Stanley served as the lead underwriters for the deal.

On February 4th, One Medical announced the closing of its initial public offering of 20,125,000 shares of common stock at a price of $14.00 per share, which includes the full exercise of the underwriters’ option to purchase 2,625,000 additional shares of common stock. Including the option exercise, the gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses payable by One Medical, were approximately $281.8 million.

About One Medical

One Medical is a membership-based primary care platform with seamless digital health and inviting in-office care, convenient to where people work, shop, live and click. One Medical’s mission is to transform health care for all through a human-centered, technology-powered model.

Headquartered in San Francisco, 1Life Healthcare, Inc. is the administrative and managerial services company for the affiliated One Medical physician-owned professional corporations that deliver medical services in-office and virtually. 1Life and the One Medical entities do business under the “One Medical” brand.