4 takeaways from Alignment’s IPO submitting


One other tech-enabled insurance coverage startup is lining as much as go public. Alignment Healthcare, a startup providing Medicare Benefit plans, filed preliminary IPO paperwork with the Securities and Trade Fee.

The Orange-based startup hasn’t but priced its shares, however its S-1 submitting shared some insights on the place the corporate presently stands.

Like lots of its friends, Alignment touts its know-how to distinguish itself from a rising variety of Medicare Benefit plans. It says it makes use of predictive analytics to find out whether or not seniors are “wholesome,” “pre-chronic” or “continual,” to tailor their care. It additionally has a 24/7 line that members can name for well being wants, transportation, care navigation and different companies.

The corporate presently affords Medicare Benefit plans in 22 markets, largely in California, North Carolina and Nevada. The Facilities for Medicare and Medicaid Providers (CMS) gave its plans a 4-star ranking in 2021.

Within the long-term, Alignment mentioned it plans to develop by constructing out further product traces, comparable to imaginative and prescient, dental and specialty pharmacy, and add hospice, residence well being and behavioral well being suppliers.

Listed below are some extra takeaways from Alignment’s IPO submitting:

  • Between 2019 and 2020, Alignment noticed its income improve by 27%, for a complete of $959 million. Its membership additionally elevated by 38.5%. In whole, the corporate has 81,500 members—greater than fellow Medicare Benefit startup Clover Well being, which had over 66,000 members as of February. However Alignment will nonetheless face the identical problem as a few of its opponents in beating out the bigger insurance coverage incumbents. UnitedHealthcare, for instance, had 5.7 million Medicare Advantage members at the end of 2020.
  • Alignment has operated at a web loss for the historical past of the enterprise. However that web loss narrowed, no less than within the final 12 months, from $44.7 million in 2019 to $22.9 million in 2020. The startup has an impressive $150 million mortgage that may come due in 2023.
  • The corporate indicated that it deliberate to check out CMS’ direct contracting mannequin with a small variety of members. Nonetheless, the mannequin, which might have tied Medicare funds to spending and high quality for a whole area, is currently being reviewed by the Biden Administration
  • Traders Basic Atlantic and Warburg Pincus will personal a controlling stake within the firm, giving them important affect over board appointments and shareholder votes. Alignment has not but disclosed what proportion stake they’ll have within the firm. Basic Atlantic and Warburg Pincus each led previous non-public fairness funding rounds within the firm. Constancy Investments, which can also be a 5% shareholder within the firm, led a $135 million funding round last year.

Picture credit score: designer491, Getty Photos


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