Waystar files to go public, signaling the end of the healthtech IPO drought

The healthcare payment platform will be be listed on the Nasdaq under the symbol "WAY"

How bad has the market been for healthtech IPOs? So bad that there hasn't been one in over two years: the last one was diagnostic testing platform Cue Health in September 2021. In fact, there were only two digital health companies that went public in all of 2022,  Akili Interactive and Euda Health, and both were SPAC deals.

More healthtech companies have left the private market than entered it since 2021, including One Medical after being bought by Amazon for $3.9 billion; Oak Street Health after being bought by CVS for $10.6 billion; Pear Healthcare, which filed for chapter 11 bankruptcy; and, most recently, Thorne Healthcare, which was bought by L Catterton for $680 million, a deal that closed earlier this week. 

Finally, however, there's some light at the end of the tunnel as Waystar, a healthcare payment platform, announced on Wednesday that it filed for an initial public offering. The company's stock will be listed on the Nasdaq under the symbol "WAY." 

Waystar, which was formed from the merger of two revenue cycle management companies, Navicure and ZirMed, "provides healthcare organizations with mission-critical cloud software that simplifies healthcare payments," the company wrote in its S-1 filing with the SEC. 

"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," it says.

"We leverage internally developed artificial intelligence (“AI”) as well as proprietary, advanced algorithms to automate payment-related workflow tasks and drive continuous improvement, which enhances claim and billing accuracy, enriches data integrity, and reduces labor costs for providers."

Waystar's customer base currently includes 30,000 clients, representing approximately one million distinct providers, including 18 of the top 22 U.S. News Best Hospitals. In 2022, it facilitated over 4 billion healthcare payments transactions, including over $900 billion in gross claims volume, spanning approximately 50% of patients in the U.S.

The company makes money from subscription revenue and volume-based revenue, which account for 99% of total revenue for all periods presented, along with software implementation fees and hardware sales to facilitate patient payments. The majority of its money comes from subscription revenue, representing 57.8% and 52% of revenue in 2021 and 2022, respectively; volume-based revenue accounted for 41.8% in 2021 and 47.6% in 2022. 

Overall, revenue increased 22% year-over-year in 2022, from $578.5 million to $704.8 million.

For the six months ending on June 30, 2023, Waystar generated revenue of $387.1 million, a 12% increase compared to revenue of $344.8 million for the same period in the prior year, while its net loss of $21.4 million was a 16% decrease compared to $25.4 million the year before.