Accolade, a start-up that helps workers navigate their health benefits and dealings with insurance companies, has hired banks including Goldman Sachs and Morgan Stanley to advise ahead of a possible initial public offering, according to people familiar with the matter.
The company is expected to file later this year, said the people, who asked not to be named because the plans are confidential. They cautioned that plans to go public might change depending on the state of the economy and the anticipated outcome of the 2020 U.S. elections.
Representatives from Accolade, Goldman Sachs and Morgan Stanley declined to comment. Accolade was last valued at about $620 million, according to Pitchbook, and has raised more than $230 million in venture financing, according to Crunchbase.
Should Accolade go public, it will join a growing number of health-technology companies that are testing the public markets. One Medical, a Google-backed primary care chain that hired banks at the end of 2019, just filed paperwork for its IPO, and prior to that, Livongo, a chronic disease management company and Progyny, a fertility benefits provider, made their public debuts. Like Accolade, these companies sell their health services to a mix of self-insured employers and health plans.
Accolade offers an app and web service for workers to get information from trained human coaches on things like in-network primary care doctors or what's included in corporate benefits packages. The company's largest customers include Comcast and Lowe's, which are charged a fee based on total number of employees. Comcast, through its ventures arm, is also an investor.
Accolade sells employers on potential cost savings from their workers using the service, but there's also a pitch around productivity gains. It reduces the time that workers spend searching for answers about their benefits, or on the phone with hospitals and health insurers dealing with complex medical bills. The company's technology also helps its human staff provide feedback quickly, or to flag new members such as those with multiple chronic conditions that might need additional help from a coach.
The company, which started in 2007, said in the summer of 2019 that it aimed to double its 120-person Seattle team in the coming years. In October, it announced an extension of its partnership with the health insurer Humana, which also included a $20 million strategic investment. Also that month, it brought on a new chief medical officer from the World Bank, who specializes in public health.
"Healthcare is an astronomical expense for every company – big and small – in relation to their overall balance sheet," the company's CEO Raj Singh, recently told Geekwire. "CFOs are starting to push back on that expense. Seeing three big companies say 'enough' is driving other employers to start questioning and take action."
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.