Castlight Raises IPO Price - Market News | Financial Buzz

Castlight Raises IPO Price

Castlight Health, IPO, ValueCastlight Health, a health software company, has increased its range of share prices to $13 – $15, from the previous $9 – $11 range mentioned in the initial filing. The consequence of this increase is that the company will raise approximately $140 million, about 40 percent more than the company’s initial plans. This could result in a market capitalization of approximately $1.5 billion.

About Castlight

The six year old company has its headquarters in San Francisco. The company has a bouquet of products which transform into higher stock multiples and big money in the form of software-as-a-service, information technology with specialization in healthcare and cloud computing.

The products of Castlight complement the Affordable Care Act or Obamacare. Similar to the new law, which utilizes the policy to control the costs of healthcare, partly by measuring quality and costs, and then pushing hospitals and patients towards more efficient choices, Castlight products assist companies that pay for the healthcare of employees.

Castlight came into prominence last year when it collected funding to the tune of $100 million and announced a series of important customer acquisitions, like Life Technologies, Honeywell and also Indiana University. The 2013 revenue of the company was $13 billion, a jump from the $4.2 million in 2012.

Efficient marketplace

According to Giovanni Colella, CEO, Castlight, the company makes healthcare a very efficient marketplace. This is a huge business opportunity. US companies who self-insure spend about $620 billion per year on the healthcare of about 70 million employees and the employees’ dependents. Castlight has estimated $5 billion in yearly sales if all the 70 million patients utilized Castlight or the company’s competition. A majority of Castlight competition is insurance companies.

According to Will Preston, analyst at Renaissance Capital, the above-mentioned $5 billion is a representative of only $71 per individual if healthcare is provided by the company. Since the average expense of employer-offered insurance comes to $16,351, Castlight is a winner all the way.

Castlight already has a number of clients who save a whopping 13 percent on spending for health. Research conducted by the Institute of Medicine reveals that  30 percent of US healthcare is wasted. This transforms into $750 million in waste, making the estimated cost-contained technology market an easy bet. Many more companies are eager to join as Castlight clients, joining the likes of Wal-Mart (NYSE: WMT), Safeway (NYSE: SWY) and Microsoft (NASDAQ: MSFT).