One Medical parent 1Life Healthcare priced its initial public offering at $14 per share late Thursday, at the bottom of the expected range of $14-$16 per share.
The health care services firm, which is not yet profitable, raised $245 million through JP Morgan and Morgan Stanley.
The company had been valued at more than $1.5 billion, with private investors including Carlyle Group, Oak Partners, venture capital firm Benchmark and Google — which is also One Medical's biggest corporate customer, accounting for nearly 10% of revenues.
The San Francisco-based direct primary-care provider operates membership-based medical offices in nine major markets including San Francisco, New York and Chicago. It aims to make care more affordable and accessible, with same-day appointments and round-the-clock digital support through telehealth consultations.
The company has 400,000 members across 77 medical offices, who pay $199 a year for membership, and it counts more than 4,000 employer customers who foot the membership bill for their workers.
One Medical reported revenue growth of 29% in the first nine months of last year to nearly $200 million in its IPO regulatory filing. The company derives revenues from membership fees, billing insurers for services and through network partnerships with health systems.
But its costs have risen, as well, as the company has built up its roster of physicians, medical staff and clinic offices. For the first nine months of last year, the firm recorded a net loss of more than $33 million, up from $26 million in the year prior.
"One Medical is attempting to disrupt a fairly large primary care market with a multi-pronged strategy," MKM partners analyst Ronit Kulkarni said in a note to clients last week. "However, we haven't seen signs of sustainable unit economics based on acquisition, retention, and engagement of key stakeholders, including employers, consumers, and physicians."
The lack of profitability could give investors pause, after highly valued IPOs of health-tech firms like Livongo and Peloton struggled in their market debuts last year.
Shares of One Medical's parent firm 1Life Healthcare will begin trading on the Nasdaq on Friday under the ticker ONEM.