After a challenging quarter, the insurance company Bright Health is Raised US$750 million in funding. Another insurance company joined as an investor, which is an unusual move. Both Cigna Ventures and Bright’s largest shareholder New Enterprise Associates participated in the financing.
Tom Richards, head of Cigna Ventures, talked about potential opportunities to collaborate with Bright’s supplier support platform NeueHealth to help practice shift to value-based contracts.
“We seek to be the partner of choice, and we look forward to exploring new ways that NeueHealth and Evernorth may serve each other’s customers and customers,” he said in the press release.
Bright was founded in 2016 by Bob Sheehy, the former CEO of UnitedHealthcare, focusing on individual marketing plans and Medicare Advantage plans, although it has also expanded to some small group plans. It operates in 13 states.
In June, the company went public for US$1.3 billion and plans to expand into new markets. Although its initial public offering is priced at US$18 per share, its share price has since shrunk to a small part of it, and the transaction price is less than US$4 per share.
The company has been in a state of loss, Reported net loss of 296.7 million U.S. dollars In the most recent quarter, by comparison, the third quarter of 2020 has a net loss of $59.3 million. Part of the reason is that medical costs are higher than expected, as the Delta variant triggered a new wave of Covid-19 cases in late summer. In the third quarter, Bright reported a medical cost ratio of 103%, which means that its expenditure on medical costs exceeded the premiums it brought.
The financing is expected to be completed in January. Bright Health’s share price rose on the news and closed at $4.35 on Thursday.
Photo credit: aurielaki, Getty Images
