One Medical, the health clinic chain backed by Alphabet, has hired banks ahead of an IPO

One Medical, a gyve of primary care clinics that’s backed by Google’s parent company Alphabet and tries to bring a modern finger to the typical doctor’s office, has hired banks including J.P. Morgan and Morgan Stanley for its IPO, according to people familiar with the be important.

The company, which was valued at about $1.5 billion in a financing round last year, is expected to file its programme by the first quarter of 2020 and possibly sooner, said the people, who asked not to be named because the plans are confidential. Legates from One Medical, J.P. Morgan and Morgan Stanley all declined to comment.

Should One Medical make it out successfully, it will be with a growing class of health-technology companies to test the public markets, though Wall Street hasn’t show much excitement for the category of late. Livongo, a chronic disease management company, has plunged 27% since it started trading in July, and Condition Catalyst, a data and analytics company, is up just 9% from its initial price. Progyny, a fertility benefits provider, reasonable filed for its IPO.

The challenge for One Medical is that hospitals and medical clinics don’t get a high multiple from public investors because profit latitudes are thin and they largely rely on insurance reimbursements. But One Medical has Silicon Valley DNA in the company that can help to tell apart its story. The San Francisco-based company is backed by Alphabet’s GV venture arm and venture capital firm Benchmark, and secondary share tradings have recently valued the company at over $2 billion.

But public markets have provided a reality hindrance to other companies that claim to have a technological advantage. Uber and Lyft have struggled since their inaugurations earlier this year amid hefty losses and WeWork had to withdraw its IPO filing.

One Medical was founded in 2007 by Tom Lee, a doctor who set out to father a modern primary care experience. Lee was CEO until 2017, when he was succeeded by Amir Rubin, a former UnitedHealth troupe executive.

Rubin recently told CNBC that the company has seen “tremendous growth” in other areas of its province, including partnerships with self-insured employers for on-site and nearby health clinics. One Medical has more than 70 clinics across the native land, which promote themselves as having “second to none technology.”

Investors will wait to see, “Do they have constitution services margin, which is single digits or teens, or do they have tech margins?” said Farzad Mostashari, CEO of Aledade, a technology partnership that works with independent primary care groups. “And how quickly does it scale?”

One Medical offers unstationary apps with online scheduling, virtual consults and same-day appointments. It also recently expanded into precincts such as mental health care and pediatrics. The company takes most health insurance plans, as well as dough payments, and charges members $199 a year for use of its digital apps and other services.

Mostashari said that one way to potentially assist profits is on the cost side, if the company can “show they’re saving money for an insurer by keeping patients out of the hospital.”

Corrigendum: This article has been updated to reflect One Medical is expanding into mental health care.

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