Castlight Health Files $2 Billion IPO

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San Francisco-based Castlight Health has quietly filed paperwork with the SEC to finalize an initial public offering expected later this year. Goldman Sachs is rumored to be leading the IPO, with underwriting support from Morgan Stanley.

Castlight has raised $181 million in VC funding since its 2008 launch, including a massive $100 million Series D round closed in 2012. Venrock, Maverick Capital, Oak Investment Partners, Morgan Stanley, U.S. Venture Partners, the Wellcome Trust, and T. Rowe Price all have money in Castlight Health. In 2010 and 2011 Castlight was named to the Wall Street Journal’s top 50 VC-backed startups. The company is looking for a $2 billion IPO valuation.

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Castlight is working to bring cost transparency to healthcare consumers by building web-based resources for researching new doctors and health services. These tools are designed to be useful at the point of making medical decisions, such as finding a new primary care doctor or specialists. To drive patients toward financially prudent decisions, Castlight displays key financial information, such as copay and average out of pocket expenses for procedures done at different facilities, and in different care settings.

To combat the false perception that higher cost always equals higher quality, Castlight couples this financial information with detailed quality data about the hospital or physician so that patient’s can make educated decisions about what they are choosing and if the out of pocket cost is worth the level of quality being delivered.

At the end of the day Castlight wants to make it easy and convenient for patients to identify which local facilities and providers are covered by their insurance, which can deliver the needed care without generating significant out of pocket costs, and then of those, which have the best quality records.

Castlight was founded by athenahealth co-founder Todd Park. Park was just 24 in 1997 when he and Jonathan Bush formed athenahealth. Since that time, Park has worked in the government and private sectors. He now holds the position of US Chief Technology Officer.

Castlight has landed some major employers as customers. Indiana University, Butler University, CVS, Kraft Foods, Liberty Mutual, the NCAA, and even Castlight investor T. Rowe Price are all signed on as customers. Castlight customers have claimed significant cost savings that they attribute to benefits platform, including Life Technology which spent 13 percent less on healthcare costs than forecasted in the year following their migration to Castlight as a health benefits manager.


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