Mobile Health Benefit Platform Accolade Seeks IPO, Has $620M Valuation

Health tech startup Accolade, with headquarters in Seattle and Philadelphia, filed with the Security and Exchange Commission (SEC) to raise $100 million for an initial public offering (IPO) on Friday (Feb. 28), according to reports. 

Accolade capitalizes on machine learning, artificial intelligence (AI) and mobile apps to enable members to easily traverse their health care benefits. Employers pay a subscription cost that aligns with the size of its total workforce.

Lead book-running managers for the IPO included Goldman Sachs, Morgan Stanley and BofA Securities. Book running managers were Credit Suisse, Piper Sandler and William Blair. Co-managers are Baird and SVB Leerink.

CEO Raj Singh leads the health benefits platform, and Chief Product Officer Mike Hilton, both co-founders of the travel expense software firm Concur. 

So far, Accolade has raised over $230 million with a valuation of roughly $620 million, according to PitchBook. Investors include Andreessen Horowitz, Carrick Capital Partners, Madrona Venture Group and McKesson Ventures, among others. 

In October, Accolade raised $20 million from health insurance giant Humana. The two firms have had an ongoing collaboration. 

According to the startup, it services 53 corporate clients with 1.5 million members in such sectors as media, technology, financial services, transportation, energy, and retail.

According to its filing, one of the company’s downsides is its dependence on “a limited number of customers” for a “significant portion of our revenue.” 

Accolade’s biggest clients — Comcast Cable, Lowe’s and United Airlines — made up 60 percent of its 2019 fiscal year revenue. On its own, Comcast accounted for 35 percent of Accolade’s revenue.

The company’s workforce grew from 756 people in November 2016, to 1,174 by Nov. 30, 2019. 

Accolade indicated that the number of shares being offered are not yet determined. Further, it said the $100 million maximum aggregate offering price in the filing was only for the calculation of the registration fee.

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