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June 24 (Reuters) - Bright Health Group’s shares fell more than 5% in their New York Stock Exchange debut on Thursday, valuing the Tiger Global and Blackstone Group Inc backed health insurance startup at $10.6 billion.
The company’s stock opened at $17, compared with the initial public offering price of $18 per share. Bright Health had priced 51.3 million shares below its targeted price range of $20 to $23, raising $924.3 million.
Bright Health’s listing comes as more people seek remote healthcare due to the COVID-19 pandemic, supercharging the telemedicine market and prompting the companies to expand their scale.
Health insurance startup Oscar Health, backed by Google parent Alphabet Inc, was valued at over $7 billion in its market debut in March, while Clover Health last year agreed to go public through a merger with a blank-check firm backed by venture capitalist Chamath Palihapitiya.
Minneapolis-based Bright Health runs two businesses, NeueHealth and Bright HealthCare, through which it offers virtual and in-person clinical care to patients through affiliated primary care clinics. It also sells Medicare and commercial health insurance across 14 states in the United States.
Bright Health, co-founded in 2015 by UnitedHealth Group Inc’s former chief executive officer Bob Sheehy, generated over $1.2 billion in revenue in 2020, underscoring a boom in the healthcare technology sector.
The company’s net losses nearly doubled to $248 million in 2020 from $125 million a year earlier, and it has been reporting losses since it was founded.
Bright Health raised $500 million in a late-stage funding round in September last year from investors such as Tiger Global Management, T. Rowe Price Associates and Blackstone, bringing the total equity raised to more than $1.5 billion.
J.P. Morgan, Goldman Sachs, Morgan Stanley and Barclays were the lead underwriters for the offering. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shinjini Ganguli)