Succession fans may be excited to hear a “Waystar” is going public.
Yet there is no hostile takeover or boardroom drama to see here; in fact, this “Waystar” is not even a media company.
Waystar Holding Corp. is a health tech company whose cloud-based software platform helps hospitals and clinics manage payments. The company intends to list on the Nasdaq under the ticker “WAY.”
On October 26, the company submitted an updated S-1/A, listing seven new underwriters for its public launch. The new joint book-runners include William Blair, Evercore ISI, BofA Securities, RBC Capital Markets, Deutsche Bank Securities, Canaccord Genuity, and Raymond James. These new runners join the original trio of J.P. Morgan, Goldman Sachs, and Barclays.
Waystar confidentially reported for IPO in August before submitting its S-1 form to the Securities and Exchange Commission (SEC) on October 16.
At this stage, the company has not released pricing terms for the IPO, instead citing the placeholder sum of $100 million. In August, Reuters cited insiders who believe the deal could value the firm at $8 billion.
Waystar was formed in 2017 out of the merger of two revenue cycle management firms, Navicure and ZirMed. In 2019, the firm got busy buying up several analytics solutions providers, including Connance, Ovation Revenue Cycle Services’ transaction services tech, PARO and Digitize.AI.
Matthew Hawkins has been at the helm as our Chief Executive since October 2017, having previously served as President at medical laboratory and diagnostic software developer Sunquest Information Systems.
New ‘Way’ to Pay
The company’s software aims to navigate the matrix of healthcare payment processing, which is riddled with complexity for health providers.
“The process for determining how much a provider should be reimbursed involves millions of permutations of variables, such as over 10,000 diagnosis codes that are constantly changing and unique payer contracts, each with individual rules, processes, and reimbursement requirements,” reads its prospectus.
Waystar says the process is made more cumbersome by constantly shifting regulatory and time-consuming appeals procedures. Its software claims to optimize the process to cut down on administrative costs for healthcare providers, beefing up their bottom line.
As for Waystar’s topline, its revenue is growing, though the company is still in the red. It reported growing revenue and shrinking losses for 2022, with $705 million in revenue for fiscal 2022 and a net loss of $44 million, as opposed to $579 in revenue and a loss of $47 million for 2021.
The vital signs monitor is barely beeping for health tech IPOs at the moment.
Only two digital health companies made it to market last year – Akili Interactive and Euda Health – both were Special Purpose Acquisition Company (SPAC) deals. Depending on the success of the launch, Waystar could pave the way for more firms in the space to take the plunge and go public.
In sizing up the deal, interested investors will consider Waystar’s growth prospects and assess the current market climate for such IPOs, among other factors.