Kushner-backed Oscar pushes ahead with NYSE IPO

2 min read
Anthony Hughes

Oscar Health filed publicly late Friday for an NYSE IPO that could launch later this month.

Goldman Sachs, Morgan Stanley and Allen & Co lead a 10-firm syndicate that expects to offer both primary and secondary shares in the eight-year-old tech-enabled health insurance company.

Oscar is led by co-founders Mario Schlosser and Josh Kushner (the brother of former President Donald Trump’s son-in-law Jared) and is backed by Alphabet and Peter Thiel.

Named after Kushner’s great-grandfather, the company first filed confidentially on November 6 (or three days after the Presidential election) before publicly announced on December 21 that it had filed confidentially.

“We are sometimes asked whether Oscar is a tech company or a health care company,” Schlosser and Kushner write in a letter to investors contained in the filing.

“Our answer is that we use the tools and mindset of a consumer technology company to solve problems in health care.”

Formed in the wake of the passage of the Affordable Care Act by the Obama Administration, the company now offers individual health insurance plans through marketplaces in 15 states, representing nearly 80% of its 529,000 members.

Risk factors cited in the filing include further changes to the ACA under the Biden Administration, noting “market and political dynamics may increase the risk that our (marketplace products) will be selected by individuals who have a higher risk profile or utilisation rate or lower subsidisation rate than we anticipated when we established the pricing…, possibly leading to financial losses.”

Oscar’s premiums before ceded reinsurance surged 61% to US$1.7bn last year, driven primarily driven by higher membership in existing markets as well as expansion into six new states and the introduction of Medicare Advantage plans.

However, total revenue fell 5% in part because reinsurance premiums ceded increased 113% to US$1.22bn. It also posted a 55% wider net loss of US$406.8m.

The company counts former Uber Technologies executive Meghan Joyce as a senior executive, former Chancellor of the New York City public school system Joel Klein as its chief policy and strategy officer, and Obama Administration senior adviser David Plouffe as a board member.

According to the filing, Alphabet has invested US$452m, Thiel’s Founders Fund US$126m and Kushner’s Thrive Capital US$76m in Oscar’s previous private funding rounds.