Is the next Lemonade (NYSE:LMND) about to start trading? That is what some investors think, after learning that insurtech Oscar filed confidentially for an initial public offering. So what is Oscar all about? And why is a potential Oscar IPO reminding so many of LMND stock?
To start, investors should learn the basics of Oscar. Essentially, Oscar is a health insurance startup. What makes it stand out, however, is its participation in the world of insurtech. This means Oscar relies on innovative technology to make the traditional insurance industry more efficient, and more friendly to consumers.
With that in mind, here are 11 things to know about a potential Oscar IPO:
- Oscar announced Monday via a company blog post that it had filed confidentially for an IPO.
- At this time, the company says it has not determined the IPO size or price range.
- Investors should note that the company has been in business since 2012.
- Since then, it has reached more than 400,000 Americans across more than 200 counties.
- The company got its start selling health insurance plans to individuals under the Affordable Care Act. However, it has since diversified its approach.
- Now, Oscar has individual and family plans, Medicare Advantage and small group products.
- Interestingly, Josh Kushner of Thrive Capital is an Oscar backer. He is also the brother of Jared Kushner, the son-in-law of President Donald Trump.
- As of a 2018 funding round, Oscar had a valuation greater than $3 billion.
- Most recently, the company raised $140 million in a funding round via Tiger Global Management.
- Oscar says it is the first health insurance company to use a full-stack technology platform.
- Investors should also note that it offers 24-hours-a-day telemedicine services for no extra fee.
Oscar IPO: The Next LMND Stock?
So why should investors care about the Oscar IPO right now, especially without more information about its plans to come public? Well, it turns out that much of the appeal is in its potential. Specifically, many investors are eyeing the recent IPO of insurtech peer Lemonade and betting Oscar will be the next big thing to hit the industry.
Remember, LMND stock came public to great hype. Riding a wave of IPO interest and the stay-at-home trend, Lemonade seemed like the perfect company. With the click of a few buttons online, homeowners, renters and now pet owners can get insurance policies. The ease, the digital access and the focus on younger consumers has made Lemonade increasingly popular. LMND stock is up more than 150% since its July 2020 IPO.
With this in mind, investors have big hopes for the Oscar IPO, especially as the company promises to make health insurance more digital and accessible. And building on that, Oscar is planning for big growth in 2021. Through an IPO, the company says it can expand from its $2 billion revenue base. Additionally, by 2021, its policies will be available in 18 states. This is important, especially as Oscar appears to be leading the way in telemedicine coverage. According to Bloomberg, the company was the first to offer telemedicine services for no extra fees. Current estimates show that 30% of its members have taken advantage of that, compared to 10% telemedicine usage rate in the rest of the U.S.
Ahead of a potential Oscar IPO, keep this insurtech play on your radar. It could very well be the next LMND stock.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.