Alphabet-Backed Healthcare Startup, One Medical, To IPO

One Medical, a conglomerate of technology-driven primary care offices backed by Google’s Alphabet, has filed an initial public offering (IPO), One Medical announced on Friday (Jan. 3). 

The San Francisco-headquartered startup runs membership-based healthcare clinics and was launched by internal medicine doctor Tom Lee, who served as the company’s chief executive officer until 2017. Amir Rubin, a former UnitedHealth group executive, succeeded Lee. One Medical was valued at about $1.5 billion in a 2018 funding round. 

One Medical is backed by technology and management firm 1Life Healthcare and will trade under the symbol “ONEM.” It has applied as common stock on the Nasdaq Global Select Market. No announcement was made regarding the number of shares being offered or the price ranges.

Investments in One Medical were led by the Carlyle Group, which owns 26.8 percent of the company’s common stock pre-offering. Other investors include Benchmark Capital Partners, which owns 13 percent, and Oak Investment Partners, with 11.4 percent.

According to the filing, One Medical has nine locations — Boston, Chicago, Los Angeles, New York, Phoenix, San Diego, the San Francisco Bay Area, Seattle and Washington, D.C. It “primarily serves a working-age, commercially insured population, charging them a $199 annual fee,” the filing said. As of September, the company had 77 physical offices. Three more locations are in the works.

Google is also one of its biggest clients, providing 10 percent of One Medical’s revenue stream. 

Although One Medical’s membership grew 324 percent in five years and numbers have reached almost 400,000, the firm posted a $44.4 million net loss in 2018 on $212.7 million in net revenue. The previous year, in 2017, net loss was $30.8 million on $176.8 million in net revenue.

In October, One Medical joined forces with JPMorgan and Morgan Stanley for an IPO sometime during the first quarter of 2020.

Healthcare spending has grown from $75 billion in 1970 to as much as $3.5 trillion in 2018, as measured by Kaiser Family Foundation analysis of National Health Expenditure data.