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New York City-based Phreesia is the latest digital health startup set to go public in 2019
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Another startup made its way onto the growing list of digital health firms planning to go public this year: New York City-based healthcare software company Phreesia filed for a $125 million IPO.
Phreesia develops a patient intake management platform that provider organizations can use to speed up tasks like patient check-in, and it boasts partnerships with a host of electronic health record system vendors, including Epic, Cerner, and Allscripts, per its website.
Phreesia is likely confident that its broad client base and growing revenue will be conducive to a successful IPO.Since it's been up and running for nearly 15 years and has 1,600 health firms under its wing, investors might view Phreesia as a strong bet.
But Phreesia's success is evident from more than just its broad network: Its total revenue spiked about 25% year-over-year (YoY) to $100 million in its fiscal year 2019 (ended January 31, 2019), up from $80 million in its fiscal year 2018 (ended January 31, 2018).
There are a handful of other companies gearing up to go public in 2019 signaling a maturing digital health market.Change Healthcare, Ancestry.com, Health Catalyst, and Livongo are all testing the waters with public offerings after a nearly three years-long lull in digital health IPO activity. Aside from Livongo which set up shop in 2014 all have been around for over a decade, per Crunchbase.
The average age of tech companies that took their companies public was 12 in 2018, The Wall Street Journal notes . And this is partially what's held digital health companies back from going public: The market is still in a relatively early stage, and many new companies touting flashy tech might not have the proof that their products are worth the investment.
As digital health companies continue to develop and attract investors, it's more likely they'll anticipate successful IPOs. I (Zo) don't think the rate of digital health IPOs will speed up this year, but we should start to see more companies turning to IPOs over the next five years.
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