Oscar Health’s initial IPO price is so high, it makes me want to swear

Amidst all the hype that Lemonade (IPO), Root (IPO), Metromile (SPAC-led debut) and other insurtech players have generated in the last year, it’s been easy to forget about Oscar Health. But now that the company founded in 2012 is approaching the public markets, one of the early tech-themed insurance companies is catching up on the attention front.

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So this morning we’re digging into Oscar Health’s first IPO pricing interval, hoping to understand how the market is valuing its unprofitable health-insurance enterprise.

Recall that Oscar Health was valued at around $ 3.2 billion in March of 2018. That datapoint, via PitchBook, is dated. Oscar Health raised hundreds of millions since (per several venture-capital tracking databases, including Crunchbase) but we lack a final private valuation for the company.

Regardless, with Oscar Health now targeting a $ 32 to $ 34 per-share IPO range, we can get our hands dirty.

Let’s get some valuation numbers and then decide if Oscar Health feels cheap or expensive at that price.

Billion-dollar IPO

Oscar Health is looking to reap as much as $ 1.21 billion in its IPO, a huge sum. The company is selling 30,350,920 shares, with 4,650,000 additional shares reserved for its underwriters. Existing shareholders are selling another 649,080 shares.

This means that after the IPO, Oscar Health will have 197,037,445 Class A and B shares in circulation, or 201,687,445 after counting shares reserved for its underwriters.

Using the company’s $ 32 to $ 34 per-share range, we can calculate a valuation minimum of $ 6.31 billion for the company (lower share count, low-end of price range) and $ 6.86 billion (higher share count, high-end of price range). That’s the company’s simple IPO valuation.

Oscar Health may also sell up to $ 375 million of its shares at its IPO price to three different funds. The company advises that the “indication of interest is not a binding agreement or commitment to purchase,” so we can ignore it for now.

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Female-Founded Afloat App Makes Asking for Help Easier

Asking for help is hard because being vulnerable is hard. Female entrepreneur, Sarah-Allen Preston, launched an app to help people who feel like they’re sinking, but have a hard time leaning on their community to receive a helping hand. Preston shares how her own traumatic experiences pushed her to find a solution to help others create an online support system and accept help in non-traditional ways when they need it most.

When Sarah-Allen Preston shared her big idea, several people in her professional network told her not to pursue it. Not because it was a bad concept, but because it would be a huge undertaking—especially for a busy mother of three.

Sarah-Allen Preston, Afloat
(Sarah-Allen Preston, founder of Afloat)

Preston launched her app, Afloat, to help people who feel like they’re sinking. It allows users to create an online support system and send or receive help.

“I’m very tenacious,” Preston admits. “When I have a gut feeling about something I truly believe in, I need to go for it. So, when I heard people say, ‘Oh, this is kind of scary,’ I said, ‘Nope, I’m doing it.’ And I focused on all the positive feedback instead.”

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When life hands you lemons… make your neighbor lemonade

Preston isn’t your typical tech entrepreneur. In 2017, she ran a successful event design and production company, constantly sprinting from venue to venue throughout Kansas City, juggling all the little details that go into dream weddings and other high-end events. Then, something happened that stopped her in her tracks.

At just 5 months old, her youngest son was diagnosed with a congenital heart defect and needed open-heart surgery.

“That kind of rocked my world,” Preston said. “I was thrown for the first huge loop in my life where I felt so out of control and really leaned on my community for support for the first time and in a big way.”

Her friends, family and community rallied around her, giving her the love and support she needed to lead her family. But even as she traversed one of the most challenging times of her life, she was able to look past her own pain to see the suffering of others. She couldn’t help but notice that, oftentimes, patients had one or two caregivers and no other visitors came by to offer support or relief.

When her son was diagnosed, Preston began getting regular massages for stress. During these appointments, she developed a good relationship with her masseuse, openly communicating about a variety of topics, including her time spent at the hospital.

“I had a conversation with my masseuse, and she mentioned that students had to fulfill a certain amount of community service hours before they could get their massage certification,” she recalls. “And I just came from this hospital with all these stressed out, in-patient caregivers that didn’t have the support network I had, and I thought, ‘How great would it be if we could hook up these masseuses that need to fill hours with these people that have no one there for them right now?’

Preston arranged a meeting with the hospital’s family resource center. They loved the idea, so she made it happen. They now offer massage services to in-patient caregivers every Tuesday inside the hospital’s Kreamer Resource Center.

She couldn’t believe how good it felt to help others. This experience planted a seed that she filed away in the back of her mind as her son’s health improved, and her life eventually went back to normal.

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Raise your hand if you need a hand

Fast forward two years and Preston’s life was in chaos once again. She made the difficult decision to end her marriage, and, this time, she chose to suffer in silence. When her son was in trouble, she leaned on her network, but when she was in pain, she chose to isolate from her network: “I had the same support network, but I didn’t want to access them because I wasn’t ready to be vulnerable about it yet.”

She thought to herself, “I wish I could send out a signal for a little help—like dinner for my kids—with no questions asked—there should be an app for that!” Instead of wading in self-pity, Preston took action. That’s when the idea for Afloat came together.

“It started as a way just to raise your hand if you needed help,” she explains. “Or if you’re a friend with the bandwidth to give, you can hop on the app and look for ways that you can give back to your friends, your neighbors, your church, your school, whatever communities you’re a part of.”

Along with a partner, Preston used her own money to hire a developer to create the beta version of the app’s simple and friendly interface. Upon downloading, users are guided through a short onboarding process that collects basic information. They then get recommendations to join groups nearby or with interests similar to theirs, or they are prompted to create a group themselves.

Once a user is part of a group, they simply press the plus sign on the bottom of the home screen, which allows them to “ask” for or “give” help. Requests appear in the group feeds, and any “afloats” that a user is currently engaged in will populate at the top of their home screen. To send someone a gift, a user would go to the person’s profile inside the group and select the present icon. From there, they’re forwarded to the shops where they can choose what they want to send. If the giftee shared their address during sign-up, the giver doesn’t have to include any contact details.

“Everyone I was talking to was saying, ‘Yes, I do need help sometimes, but I don’t want to ask for it.’ And it’s always women because we’re so used to carrying everything on our backs. And we say, ‘No, I’m fine. I’ve got it.’ So we built this app to be so uplifting, so easy, and a place where it doesn’t feel scary to reach out and ask for help.”

“I think everyone needs to break down that barrier. Even in a group text, even to my best friends, people I’ve known for years, I wasn’t about to text them and say, ‘Hey, I’m having a bad day. Can you bring me dinner?’ It’s so weird that I wouldn’t just ask that,” she said.

For many people, that hesitation to seek help is a daily struggle. In his book, “All You Have to Do Is Ask,” Wayne Baker, a professor at the University of Michigan’s Ross School of Business, writes: “We often underestimate how willing people are to help us. And we often limit ourselves unnecessarily when we’re turned down for the first time.” Afloat is working hard to change that.

Floating forward

After a round of financing, the Afloat app launched out of beta in November 2020. The new version kicks it up a notch, intentionally incorporating small businesses into the equation.

“In our beta, we saw a lot of people paying it forward to support local businesses or trying to get their favorite organizations involved in their gifting and supporting their networks,” Preston said.

For example, a user would opt to send someone flowers from their local flower shop because their mom was in the hospital. With the new version of the app, “We still have that element of neighbors organizing a can drive or someone reaching out with, ‘Hey, I’m out of pipe cleaners I need for a homeschool project.’ But we’re also allowing these personal networks and businesses to work together to build an online community for giving.”

Imagine someone in your network posting, “I need a dozen cookies for my son’s bake sale tomorrow —I’m stuck at work!” You could answer this request by hitting, “I’m on it!” and then fulfill the request in a couple of different ways: You could buy some cookies at the store or bake them yourself and drop them off at the requestee’s home; or, because Afloat has a cookie-crafter as one of its “gifting partners,” you could purchase the cookies and arrange delivery, all within the app.

Afloat has a growing list of gifting partners, including a florist, a cook, a cookie-maker, a monogrammer, and a jeweler, who all happen to be moms. “Moms, I think, just really understand the need to have help and appreciate it,” Preston said.

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Social networking done right

Preston can’t help but wonder what the need for an app to facilitate people asking their inner circles for help says about society.

“Check out ‘The Social Dilemma’ on Netflix,” she said. “We missed the step where social media actually allows you to connect. We went from being genuinely connected to being socially disconnected. Everyone inherently has the same questions about social media, why is it so shallow? Why am I not connecting with people?

“So I think an app like this is really important because it brings a positive action into a tech space. Like when you can get a workout class on your phone. That’s something actionable. It diffuses anxiety; it starts a positive ripple effect,” Preston said.

“We’re hoping to do the same thing with this kind of do-good marketplace, whether that’s helping your neighbor out because she had to run to the grocery store and she needs you to watch her kids, or you’re running to the grocery store and you throw out via the ‘give’ button, ‘Going to Trader Joe’s, anybody need anything?’ Even a small step like that can make a huge difference for someone else.”

Unlike traditional social media, Preston said, “Afloat isn’t all about likes. It’s about really giving to people and connecting with them, connecting with your communities, and with businesses in a more authentic way.”

As we close out one of the most chaotic years in recent history, it’s evident that, more than ever, we need to lean on each other to stay afloat.

Originally published on DellTechnologies.com by Tamara Franklin

The post Female-Founded Afloat App Makes Asking for Help Easier appeared first on StartupNation.