* Shares more than double, valuing company at about $3.63
* Raises about $178 mln from offering of 11.1 mln shares
(Adds details, analyst comment and updates share movement)
By Neha Dimri
March 14 Shares of healthcare information
provider Castlight Health Inc rose more than 160
percent in their debut, making the listing the strongest by a
technology company so far this year.
Castlight raised $178 million after pricing its IPO of 11.1
million shares at $16 per share, above its expected range.
The company provides cloud-based software to help companies
manage their healthcare costs.
Castlight's shares opened at $37.50 and touched a high of
$41.95 on the New York Stock Exchange, valuing the company at
about $3.63 billion.
"Investors are building very optimistic assumptions into the
stock price and are of the opinion that it has a technology
business model that they can protect from competition and earn
big profits," said Jay Ritter, a professor and IPO expert at the
University of Florida.
Castlight was co-founded in 2008 by Todd Park, the chief
technology officer of the United States who is tasked with
fixing the U.S. government's troubled new healthcare website.
Park joined the Barack Obama administration in 2009.
San Francisco-based Castlight is betting on rising demand
from companies for healthcare data aggregation and analytics
tools amid soaring healthcare costs and norms for greater
U.S. healthcare spending is expected to touch about $3.1
trillion in 2014, with $620 billion of this coming from
employers, Castlight had said in its IPO filing, citing data
from Centers for Medicare and Medicaid Services.
The company estimates a potential $5 billion market
opportunity for the kind of services it provides, based on the
total number of people who rely on healthcare funded by
A self-insured group health plan is one in which the
employer assumes the financial risk for providing health care
benefits to its employees.
Castlight reported a seven-fold rise in revenue to about $13
million between 2011 and 2013, while net loss widened to $62.2
million from $20 million.
Other co-founders of the company include Bryan Roberts and
Giovanni Colella, who is also its CEO.
Park and Roberts were also part of the group that created
AthenaHealth Inc. Roberts is a partner with venture
capital firm Venrock Associates LP, the biggest shareholder of
Castlight with a 20.6 percent stake.
The company also counts Oak Investment Partners LP and
Fidelity Investments among its stockholders.
Castlight, which also operates the Castlight Mobile
platform, counts Aetna Inc Cigna Corp, Truven
Health Analytics Inc and ClearCost Health as rivals.
Castlight, which has signed more than 95 customers in the
last two years, also offers to customers complex, large-scale
data analytics of health care providers, insurance companies and
Goldman Sachs & Co and Morgan Stanley & Co were lead
underwriters for the offering.
(Reporting By Neha Dimri in Bangalore; Editing by Savio D'Souza
and Maju Samuel)