Livongo Health startup prepares for IPO

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What’s behind the expected IPO boom in 2019

PwC Partner & Head of Financial Services Neil Dhar discusses what’s behind the influx of IPOs expected for this year.

Digital-health startup Livongo Health Inc. is preparing for an initial public offering as soon as the third quarter of 2019, joining a horde of technology companies racing to tap the public markets.

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The startup has hired Morgan Stanley , Goldman Sachs Group Inc. and JPMorgan Chase & Co. as underwriters for an IPO that is expected to value the company in excess of $1 billion, according to people familiar with the matter. Livongo has raised roughly $240 million privately, most recently at an $800 million valuation.

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While Livongo’s IPO will be smaller than those of high-profile tech companies like Uber Technologies Inc. and Lyft Inc., Silicon Valley venture-capital firms, bankers and public investors will be watching closely. Livongo is set to be one of the first Silicon Valley companies to debut that deploys technology in an effort to change how patients receive care and to lower health-care costs.

Dozens of smaller private, venture-backed companies are jockeying to provide similar services, but none has achieved the revenue or user base of Livongo, which is on track to take in more than $100 million this year from more than 120,000 patients. Livongo expects to more than double its revenue in 2020, people familiar with its financials said. Like most fast-growing technology startups, the company is still losing money as it pushes to grow its user base.

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Unlike, for example, the taxi or hotel industry, which have experienced major overhauls as a result of technology disruption, health care so far has proved more resistant to change. The highly regulated industry’s complex web of contracts, data systems, drug-benefit managers and others make it hard for new entrants to make inroads. Alphabet Inc.’s Google ended its attempt to create an electronic health-records database in 2011, just three years after it began.