Clover Health, a provider of Medicare Advantage health plans, is poised to become a public company on Friday. It closed a $3.7 billion merger agreement this week with Social Capital Hedosophia III, a blank-check acquisition company led by billionaire Chamath Palihapitiya.
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The newly merged company, to be known as Clover Health Investments, is expected to begin trading under the new trading symbol of CLOV on the Nasdaq Global Select Market.
The Nashville-based company announced it was going public in October. The insurer provides Medicare Advantage plans for more than 50,000 members. It also developed Clover Assistant, a proprietary platform that aggregates millions of relevant health data points–claims, medical charts, diagnostics–and gives medical care providers actionable and personalized insights at the point of care.
Clover Health President Andrew Toy spoke with me about the decision to go public via a SPAC versus a direct listing, as well as about his predictions for the listing and plans for 2021.
How did you decide to do a SPAC versus traditional IPO?
Toy: 2020 was a crazy year, but we knew we wanted to target the public market. We actually almost took the initial public offering route–we had even filed our S-1. We were all the way down that pathway, had the materials and the team together. We basically were 95 percent of the way there when we started talking to Chamath, whom we had known for a while. We fit his target and decided to do it.
You mentioned that CEOs have reached out to you for guidance on SPACs. What are they wanting to know?
Toy: A couple of startup CEOs pinged me and said they were thinking of doing a SPAC, too. They had a sponsor wanting to do a Series C, but they thought about doing a SPAC instead. I told them they should not look at SPACs as the same as private funding.
Just prior to the holidays, another health insurance provider, Oscar, announced that it had confidentially filed to go public. Do you think this adds validity to what you are doing and the advancement of health insurance?
Toy: Yes, it adds validity, but you also have to think backwards: If you look at the health care delivered to your grandparents, your parents and yourself, you can imagine that it won’t be the same forever–something has to change, we can do better than this. Insurance is actually just a synonym for how we fund health care. We buy car insurance, but we may never crash our car, although we still want it just in case. With health care, we are guaranteed to need it. In addition, we are one of the few going public in a decade or so. Companies like UnitedHealthcare and Humana have been around for awhile. The last one was HealthSpring in 2006.
Photo of Andrew Toy, president of Clover Health, courtesy of Clover Health
Blogroll illustration: Dom Guzman
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