Healthcare payment software maker Waystar is looking to raise about $1.04 billion in an initial public offering, potentially marking the biggest IPO this year.
The company, backed by EQT AB and the Canada Pension Plan Investment Board, is offering 45 million shares for $20 to $23 each, according to a Tuesday filing with the U.S. Securities and Exchange Commission.
At the top of its price range, Waystar would have a market value of about $3.98 billion based on the outstanding shares listed in its filing—about 173 million shares if the underwriters exercise in full their option to purchase additional shares of common stock.
The company's IPO signals a potential upswing in the public investor market. The macroeconomic environment effectively put a freeze on the IPO market for health tech companies during the past three years. There were 20 digital health companies that went public in 2021 and only two, including prescription digital medicine company Akili, in 2022. There were no digital health IPOs in 2023.
So far this year, there have been several healthcare and health tech IPOs. Last week, Tempus AI filed for an IPO. The company is looking to raise up to $100 million in a public offering, according to some reports.
BrightSpring Health also plans to raise approximately $960 million in an IPO that would value the company at about $3 billion. The home- and community-based healthcare services provider said it would sell 53.3 million shares of its common stock between $15 and $18 each to raise between $800 million and $960 million.
Waystar serves more than 30,000 customers representing approximately 1 million distinct providers, and the company facilitated more than $5 billion in healthcare payment transactions last year, according to the S-1 filing.
Waystar's investors also include Bain Capital and Francisco Partners and their affiliates, each of which controls about 5% of the company's shares, according to its filings.
The company was formed in 2017 by the merger of revenue cycle management companies Navicure and ZirMed. Renamed Waystar in February 2018, the company provides healthcare organizations with "mission-critical cloud software that simplifies healthcare payments," the company wrote in the S-1 filing.
"Our enterprise-grade platform streamlines the complex and disparate processes our healthcare provider clients must manage to be reimbursed correctly, while improving the payments experience for providers, patients and payers," the company wrote.
Waystar says it leverages "internally developed artificial intelligence as well as proprietary, advanced algorithms" to automate payment-related workflow tasks and drive continuous improvement. Its technology enhances claim and billing accuracy, enriches data integrity and reduces labor costs for providers.
"Put simply, our software helps providers get paid faster, accurately, and more efficiently, while ensuring patients receive a modern, transparent, and consumer-friendly financial experience," the company wrote.
This week, the company also announced it was working with Google Cloud to use generative AI technology for revenue cycle capabilities. As one use case, Waystar and Google Cloud have automated the extraction of prior authorization requirements from complex payer data sets. In a proof-of concept study by Waystar, the application reduced the time to generate an authoritative report of procedural preauthorization by 99.93% while increasing accuracy by 13%, the companies said.
In 2019, Swedish global investment firm EQT Partners and the Canadian Pension Plan Investment Board bought a majority stake in Waystar, valuing the healthcare technology company at $2.7 billion. Bain Capital retained a minority stake in the company.
Also in 2019, the company went on an acquisition spree, buying several analytics solutions providers including Connance, Ovation Revenue Cycle Services' transaction services tech, PARO and Digitize.AI, a company that applies artificial intelligence to the prior authorization process.
The company says its client base is "highly diversified" with its top 10 clients accounting for only 11.3% of its total revenue.
In 2023, Waystar reported a net loss of $51.3 million on revenue of $791 million, compared to a net loss of $51.5 million on revenue of $705 million in 2022.
The company filed publicly for a Nasdaq listing in October and has been monitoring market conditions as it weighs the timing of a potential launch, Bloomberg reported.
The Louisville, Kentucky-based company plans to trade under the symbol "WAY" on the Nasdaq.
The offering is being led by JPMorgan Chase & Co., Goldman Sachs Group Inc. and Barclays PLC.