Evolent Health, a company that helps providers adopt value-based payment models, plans to raise as much as $100 million with an initial public offering.
Evolent joins digital health peers Inovalon and Teladoc in seeking to cash in on Wall Street's enthusiasm for the sector.
Evolent was co-founded by the Advisory Board Co. and the UPMC health system, and each holds more than 5% of the company, according to Evolent's filing with the Securities and Exchange Commission.
The company, which had 836 employees as of the end of April, counts Indiana University Health, WakeMed Health and Hospitals, Piedmont WellStar Health Plan and Premier Health Partners as its biggest clients.
The company lost about $52 million in 2014, which was $20 million more than it lost in 2013. It also relies heavily on those large customers. Its four largest partners accounted for 76% of its revenue in 2014.
However, its revenue more than doubled during those years, rising from $40.3 million in 2013 to $100.9 in 2014. Also, its clients on average have 5.2 years left on their contracts. And with the industry moving rapidly toward value-based care, Evolent said in the SEC filing, the market for its services will reach $46 billion in 2020.
Evolent makes money with services and technology that helps providers make the transition away from fee-for-service payment. That includes electronic health-record optimization and risk stratification, which allows providers to tell which patients need more care.
The company charges fixed fees for the initial setup and then a variable fee that rises based on the number of lives a given provider cares for under its value-based contracts and the amount of Evolent technology it uses.
Evolent plans to list its shares on the New York Stock Exchange under the ticker EVH.