Oscar Health Inc, a health insurance startup backed by Google parent Alphabet Inc , sold shares in its initial public offering (IPO) on Tuesday at $39 apiece, above its target range, to raise $1.2 billion.
The IPO gives New York-based Oscar Health a market value of $7.7 billion. The target price range on the offering of 31 million shares was raised earlier on Tuesday to $36-$38 per share, up from $32-$34.
Oscar Health sells health insurance coverage to individuals, families, small businesses and Medicare users, with 529,000 customers on its technology platform across 18 states. In 2020, Oscar Health said its customers grew 75% year-on-year as the COVID-19 pandemic increased demand for healthcare delivery through online, mobile and at-home methods.
Oscar Health said its premiums jumped 60% to $1.67 billion in 2020. The company, however, ceded most of the claims to reinsurance firms, causing revenue to fall 5.2% to $462.8 million. Net losses widened to $406.8 million from $261.2 million in the previous year, according to regulatory filings.
Oscar Health was founded in 2012 by its chief executive, Mario Schlosser, Kevin Nazemi and Joshua Kushner, the younger brother of Jared Kushner, the son-in-law of former U.S. President Donald Trump. In 2018, Alphabet took a nearly 10% stake in Oscar Health for $375 million.
Shares in Oscar Health will begin trading on the New York Stock Exchange on Wednesday under the symbol “OSCR.”
Goldman Sachs, Morgan Stanley and Allen & Company are lead underwriters for the offering.