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Oscar Health seeks a $6.7 billion (and maybe even higher?) valuation

February 22, 2021, 3:16 PM UTC

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Oscar Health, the health insurance startup last valued at $3.2 billion in 2018, is aiming for an IPO that could value it at as much as $6.7 billion.

Backed by investors including Alphabet and Thrive Capital, Oscar Health said Monday that it plans to sell 31 million shares priced between $32 to $34 apiece. At the high end of that range, the company would raise over $1 billion.

Founded in 2012, the company started by selling insurance under the Affordable Care Act, but also allows its patients to schedule doctor’s appointments and refill prescriptions through its apps. In short, the company says it hopes to create a more integrated and affordable healthcare system using tech. 

And yes, it has seen no shortage of uncertainty under President Donald Trump’s administration, which sought to repeal the Affordable Care Act. And while President Joe Biden’s administration is considerably more supportive of the program also known as Obamacare, Oscar Health still warns in its prospectus that 95% of its revenue in 2020 was derived from health plans subject to regulation from the ACA, and: “The constitutionality of the ACA itself continues to face judicial challenge.”

Still, the company managed to sell more than it did in the year prior, with premiums earned soaring 61% to $1.7 billion. But, as with many insurance companies, its business remains unprofitable. Oscar Health sought to pass on much of the risk from insuring its base to reinsurers in 2020, pushing revenue down by 5% to $462 million and bolstering its net loss by 55% to $406 million compared to the year prior.

Regardless of losses, insurtech investors seem to think there’s no time like the present to go public. Lemonade, another venture-backed insurer better known for its home and rental policies, soared in its debut in the summer, jumping 140% in its first day of trading. Home insurance startup Hippo is now in talks to go public via merger with a SPAC. Auto insurance startup Root is now valued at $4.5 billion after going public in the fall.

But not all insurtechs are made equal. While Lemonade has continued to fly in public markets, shares of Root are now trading 33% below their IPO valuation.

UNENDING SPACS: Meanwhile, look below for SPAC deals that are beginning to feel like the new normal. Billionaire Michael Dell and former Xerox CEO Ursula Burns are now each involved in a special purpose acquisition company, as is Facebook co-founder Eduardo Saverin.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

VENTURE DEALS

- Xingsheng Youxuan, a Chinese grocery delivery app, raised about $2 billion in funding valuing it at $6 billion pre-money, per Reuters. Investors included FountainVest Partners, Primavera Capital Group, Tencent, and KKR. Read more.

- Coinbase, the San Francisco-based crypto exchange, has been valued at over $100 billion in a secondary share sale, per Axios. Read more.

- Regor Therapeutics, a Shanghai-based clinical stage biotech focused on cancer, immune disorders and metabolic diseases, raised $90 million in Series B funding. Lilly Asia Ventures led the round and was joined by investors including Loyal Valley Capital, Lanting Capital, TF Capital, and Vertex Ventures China.

- Black Lake, a China-based software platform for factories, raised $77 million in Series C funding. Temasek led the round and was joined by investors including China Renaissance and Lightspeed Venture Partners. Read more.

- Creatio, a Boston-based  software company with a low-code platform for process management and CRM, raised $68 million. Volition Capital led the round and was joined by investors including Horizon Capital.

- Earnix, a Boston-based provider of A.I.-driven rating, pricing, and product personalization solutions for insurance and banking, raised $75 million in funding at a pre-money valuation of $1 billion. Insight Partners led the round and was joined by investors including JVP, Vintage Partners, and Israel Growth Partners.

- Nanit, a New York-based maker of a smart monitoring system for babies, raised $25 million in Series C funding. GV (formerly Google Ventures) led the round and was joined by investors including Jerusalem Venture Partners, Upfront Ventures, RRE Ventures, and Rho Capital Partners.

- Laundryheap, a U.K.-based maker of an on-demand laundry and dry cleaning platform, has today announced a $3.5m Series A round led by Sova VC. The round was joined by the SidebySide Partnership.

- Praxis Labs, a New York-based maker of a virtual reality-based diversity and inclusion learning platform, raised $3.2 million in seed funding. Investors include SoftBank’s SB Opportunity Fund, Norwest Venture Partners, Emerson Collective, Ulu Ventures, Precursor Ventures, Firework VC, and 20|20 Fund.

PRIVATE EQUITY

- Anaqua, a portfolio company of Astorg Asset Management, acquired Quantify IP, a Hawaii-based IP cost estimating software provider. Financial terms weren't disclosed.

- Backstage, backed by TA Associates, acquired StarNow, a New Zealand-based talent platform for actors, models, influencers and musicians and The Mandy Network, a U.K.-based talent platform for cast, crew, production services and creative professionals. Financial terms weren't disclosed.

- Mill Rock Packaging Partners, a portfolio company of Mill Rock Capital, acquired All Packaging Company, specialty paper packaging company. Financial terms weren't disclosed.

EXIT

- Thomas H. Lee Partners is weighing a sale of Material Handling Systems, a Mt. Washington, Ky.-based logistics company, in a deal that could value it at about $3 billion, per Bloomberg. Read more.

- Renaissance, backed by Francisco Partners, agreed to acquire Nearpod, Florida-based developer of teaching software for K-12 teachers. Nearpod is backed by Insight Partners, Reach Capital, and Rothenberg Ventures.

OTHER

- M&T Bank is nearing a deal to acquire with People’s United Financial, a Bridgeport, Conn.-based bank, for $7 billion, per the Wall Street Journal. Read more.

- Cisco (Nasdaq: CSCO) acquired IMImobile (AIM: IMO), a London-based provider of cloud communications software for about $730 million.

- Redfin (Nasdaq: RDFN) agreed  to acquire RentPath, an Atlanta-based owner of apartment rental marketplace websites, for $608 million in cash. RentPath previously filed for bankruptcy.

- Danone has agreed to acquire Earth Island, a U.S. plant-based foods maker. Financial terms weren't disclosed.

IPO

- Toast, the Boston-based maker of restaurant software, is preparing for an IPO that could value it at $20 billion, per the Wall Street Journal. Investors include Bessemer and TPG. Read more.

- Babbel, a German language app maker, is weighing an IPO, per Bloomberg. Read more.

- Cazoo, a U.K.-based online used car platform, is weighing an IPO in London, per Bloomberg citing sources. Investors include D1 Capital Partners and BlackRock. Read more.

SPAC

- Sixth Street Partners is asking a judge to hold the merger Owl Rock Capital Partners and Dyal Capital Partners, rival investment funds. Owl Rock and Dyal previously announced plans to go public and merge with a SPAC, valuing the duo at about $13 billion.

- Cyxtera Technologies,, a provider of retail colocation and interconnection services, will go public via merger with Starboard Value Acquisition, a SPAC backed by Starboard Value, valuing it at $3.4 billion.

- ATI Physical Therapy, an Advent-backed outpatient therapy provider, will go public via merger with Fortress Value Acquisition II, a SPAC sponsored by Fortress Investment Group, valuing the combined firm at $2.5 billion.

- Xos, a provider to the medium- and heavy-duty last-mile commercial electric vehicle market, will go public via merger with NextGen Acquisition, a SPAC. The deal values the combined firm at $2 billion.

- MSD Acquisition Corp., backed by an entity linked to Michael Dell’s family office, filed to raise $500 million to acquire a business in sectors including technology and media. Gregg Lemkau, former co-head of investment banking at Goldman Sachs, leads the company. Read more.

- Elliott Opportunity I and Elliott Opportunity II, SPACs formed by Elliott Management to seek targets in the tech sector, filed to raise $1 billion and $500 million respectively. Read more.

- Anzu Special Acquisition I, a SPAC seeking to target technologies for industrial applications, now plans to raise $350 million. Read more.

- B Capital Technology Opportunities, a SPAC from Facebook co-founder Eduardo Saverin’s B Capital Group, filed to raise $300 million. Read more.

- Plum Acquisition, a SPAC led by former Xerox CEO Ursula Burns, filed to raise $300 million. It is seeking a target with A.I. or machine learning in its operations. Read more.

- Pine Technology Acquisition, a SPAC led by AmTrust Financial Services CEO Barry Zyskind, filed to raise $300 million. Read more.

F+FS

- Dyal Capital may sell a piece of its stake in Vista Equity Partners, the Austin-based alternative assets firm, per Bloomberg. Read more.

- Peak Rock Capital, an Austin-based private equity firm, has raised about $1.6 billion out of a planned $1.8 billion for its third fund. Read more.

- Alta Partners, a San Francisco and Denver-based early-stage healthcare venture capital firm, closed Alta Partners NextGen Fund III with $275 million.

PEOPLE

- Corner Ventures, a Palo Alto, Calif.-based venture firm, named Jerome Letter as a partner.

- Infinedi Partners, a New York-based private equity firm, hired Henry Blynn as a senior associate.

- Stripe, the San Francisco-based payments firm, named Former Bank of England Governor Mark Carney as a member of its board of directors.