With one of the largest IPOs of the year, there is a lot of buzz around Castlight Health. The company was founded in
Here are 10 things to know about Castlight Health's IPO.
1. Todd Park, the co-founder of athenahealth and current
2. Castlight Health closed at $3.2 billion making its IPO one of the largest offerings this year. IMS Health is another big data vendor that had a substantial IPO this year. IMS gathers and sells data on consumers' use of prescription drugs, and its IPO raised more than $1.3 billion by selling 65 million shares for $20 apiece. The success of these two IPOs suggests investors have recognized the growing importance of big data in healthcare.
3. Morgan Stanley and Goldman Sachs acted as joint book-running managers for Castlight Health's IPO, and they were joined by four other underwriters, including Raymond James & Associates. The underwriters priced Castlight Health at $16 a share.
4. The high valuation of Castlight Health's IPO was based mostly on optimism about the company's future rather than past performances since Castlight Health only had $13 million in 2013 revenues and recorded a $62 million loss for 2013, according to a New York Times report.
5. Castlight Health's low 2013 revenue may be deceiving, as the company had $108.7 million worth of agreements that had not been billed as of Dec. 31, 2013, and $51 million of that was "non-cancellable," according to a CNN Money report.
6. Although Castlight Health had been valued at $16 a share, high demand caused the stock to open at $37.50 —134 percent above its expected value, according to a Wall Street Journal report.
7. Castlight Health is one of nine IPOs, including Varonis Systems, a business-tehcnology startup, to double in value on its first day of trading over the past nine months, according to a USA Today report.
8. Venture capitalists, including Venrock, T.Rowe Price, and Redmile Group, pumped $181 million into Castlight Health before its IPO. The IPO was seen as a win for Venrock, who owned 20.6 percent of Castlight Health before the public offering and 18 percent after the offering. Venrock's stake in Castlight Health is now worth approximately $620 million, according to Dow Jones.
9. Castlight Health already has 24 corporate customers in the Fortune 500, including Walmart, CVS Caremark and Liberty Mutual. Walmart was responsible for 16 percent of Castlight Health's revenue in 2013, or about $2 million, and the contract between Castlight Health and Walmart is set to expire at the end of 2015, according to Yahoo Finance.
10. Castlight Health increased its annual revenue from $4 million in 2012 to $13 million in 2013, and with its backlogged agreements, record number of new customers and the demand for price transparency in healthcare, the company is expected to grow exponentially in the next year, with some predicting the company's revenue to more than triple.
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