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HealthJoy may raise crossover funding next year, ahead of IPO in 2025, CEO says

HealthJoy, a Chicago-based healthcare navigation platform, may raise crossover funding next year, ahead of a public debut, said Justin Holland, the CEO.

Right now, HealthJoy’s goal is to be profitable, and then it may decide to raise a large crossover funding round in the USD 100m to USD 200m range within the 2023 calendar year to accelerate growth, Holland said. 

HealthJoy is helping employees navigate their healthcare benefits more easily with its virtual care platform that engages employees with healthcare products and services, and focuses on preventive care options. Its platform integrates with an employer's benefit package with live 24/7 concierge services.

The company frequently discusses options with potential investors and is receptive to new approaches, Holland noted. It welcomes investors in the sector with knowledge of the healthcare and health plan ecosystem. Crossover funding expertise is also desired, he said.

HealthJoy sees a path to a public debut, he said. The company is positioning itself to be ready for an initial public offering when the markets are more receptive to new issuers, which may be in 2025, the CEO noted. It prefers a traditional IPO route as opposed to a special purpose acquisition company (SPAC) deal, he said. SPACs “came in hot” last year but largely delivered negative results; therefore, HealthJoy prefers a safer traditional IPO option, he explained. 

The company will probably engage a banker in 12 months for an IPO, he said. It does not engage bankers for its fundraise events. Herman Law Firm serves as its legal counsel.

Teladoc [NYSE:TDOC], Accolade [NASDAQ:ACCD], Castlight Health and Quantum Health are comparable public companies to HealthJoy, Holland said. Accolade made its public debut in 2020 at a USD 1.2bn valuation. Eight years after its IPO, Castlight Health was acquired by Vera Whole Health in January for USD 370m. Quantum Health was founded in 1999 and is backed by Warburg Pincus and Great Hill Partners. While it can be measured against Teladoc, Holland said they are also complementary partners as Teladoc is able to deploy its virtual care offering to HealthJoy’s customers segment.

HealthJoy raised USD 60m in Series D funding in October, bringing its total funding to USD 110m, said Holland. Founded in 2014, its investors include Valspring Capital, Endeavour Vision, CIBC Innovation Banking, U.S. Venture Partners, GoHealth founders Brandon Cruz and Clint Jones, Health Velocity Capital, Nueterra Capital and Epic.

HealthJoy, which declined to disclose revenue, has about 1,100 customers including brokers, enterprise companies and third-party administrators, Holland said. It expects 60% annual growth across its three customer channels, he said. 

In 1Q and 2Q next year, it is further developing a comprehensive clinical suite to help human resource departments and brokers navigate claim categories such as cancer and cardiometabolic disease by allowing easier access to preventive care. Additionally, via its partnership with Teladoc, HealthJoy is helping its customers to engage with its members earlier and more frequently during their healthcare journey. 

It serves more than one million lives, both employees and their dependents, across its customer base.