Accolade CEO Raj Singh on video in New York’s Times Square for the virtual ringing of the Nasdaq opening bell. (Via Nasdaq webcast)

Health benefits platform Accolade made its initial public offering Thursday morning, pricing its stock at $22/share, above the expected range of $19 to $21, and raising $220 million at a valuation of $1.2 billion in its debut on the Nasdaq stock market.

The company’s shares climbed in early trading, rising more than 40% to $30.90/share as of 10:30 a.m. Pacific time.

“We’re changing the way healthcare works in this country,” vowed Accolade CEO Raj Singh, the longtime Seattle tech entrepreneur, in a prerecorded message for the ceremonial ringing of the opening bell, broadcast in New York’s Times Square.

Accolade is trading under the symbol “ACCD.” The company splits its headquarters between Seattle and the Philadelphia area. Its IPO is Seattle’s first of the year.

The 1,200-person company helps employees at its client companies navigate their health benefits, with the help of health assistants who work directly with members and can call on nurses and other clinicians as needed.

Accolade uses a range of technologies, from machine learning to mobile apps, to make it easier for employees to access care, with the long-term goal of improving health and reducing costs. Employers are charged a subscription fee based on the total number of employees.

Among the risk factors listed in its IPO filings, Accolade says its four largest corporate customers (Comcast Cable, American Airlines, Lowe’s, and State Farm) were responsible for an aggregate total of 59% of its revenue of $132.5 million for its 2020 fiscal year, which ended in February. Its largest customer, Comcast, was responsible for nearly a quarter of its 2020 revenue. Comcast is also a major Accolade investor.

Accolade was founded in 2007 by Michael Cline and Tom Spann. The company has been led since 2015 by Singh, who previously co-founded travel expense software giant Concur, which sold to SAP for $8.3 billion in 2014. Concur co-founder Mike Hilton is the Accolade chief product officer.

Accolade CEO Raj Singh (left) and Chief Product Officer Mike Hilton (right). (GeekWire Photo / Todd Bishop)

In his comments this morning, Singh credited Cline and Spann and the company’s early employees for their vision. They “said aloud something that most people in this country wholeheartedly agree with: healthcare in this country is fundamentally broken,” he said. “What made them different, like all great entrepreneurs, is that they set out to do something about it.”

Accolade has raised more than $230 million to date, according to PitchBook. Investors include Andreessen Horowitz, Carrick Capital Partners, Madrona Venture Group and McKesson Ventures, among others. In October, Accolade landed a $20 million investment from health insurance giant Humana as part of an ongoing partnership between the two companies.

Here’s how Accolade describes its competitive landscape:

Our competitors generally fall into three categories: large health plans that provide member and provider services, such as the Blue Cross Blue Shield health plans (e.g., Anthem), Cigna, UnitedHealth Group, and Aetna; traditional advocacy and navigation companies, such as Quantum Health and Health Advocate; and an emerging cohort of companies that traditionally provided adjacent and/or exclusively digital services and are increasingly adding some version of navigation support to their offering, most notably Grand Rounds, Amino, Alight (Compass), and Castlight.

The company filed its initial IPO paperwork in late February, as the COVID-19 outbreak was beginning to spread globally. In its most recent regulatory filings, the company says the pandemic has increased the need for its technologies and services. It has launched an initiative called COVID Response Care to support employers in offering education, testing, contact tracing and return-to-work clearance, and other services.

“The recent onset of the COVID-19 global pandemic has only served to further exacerbate the complexity and frustration faced by consumers, as they seek information about the availability and accuracy of virus and antibody testing or face limits on their ability to access traditional care safely,” the filing says.

However, COVID-19 is also now listed among the risks facing the company, including the possibility of an economic downturn reducing headcount among its corporate customers, and causing some employers not to renew their contracts.

The company posted a net loss of $51.4 million for the 2020 fiscal year, an improvement from its net loss of $56.5 million the year before. Its revenue of 132.5 million was up 40% from $94.8 million the year before. Accolade had a total has 60 corporate customers, up from 53 at the time of its IPO filing, and more than 1.7 million members.

[Editor’s Note: Revenue growth figure for 2020 corrected since publication.]

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