Castlight IPO soars out of the gate
It looks like investors are drawn to the concept of price transparency in healthcare, giving Castlight affirmation this morning, with shares rising 139 percent on its first day of trading.
Trading on the New York Stock Exchange as CSLT, the stock climbed $22.39 to $38.39 from its initial price of $16.
As a healthcare price comparison company, Castlight executives knew they were on to something valuable from the get-go.
"As the recognized market leader, we know the vast potential for our healthcare transparency solutions," Giovanni Colella, MD, co-founder and CEO of the company, said in May of 2012, when Castlight was still called a startup and attracting attention and venture capital to the tune of $100,000. "Castlight Health has achieved tremendous growth in a short period of time and currently maintains a strong cash position," Colella said then. "By expanding our funding, we can respond to the growing demand for our solutions, seize major market opportunities, increase the breadth of our offerings and extend our reach."
[See also: Castlight Health IPO could be worth $2B.]
Colella co-founded Castlight in 2008, along with Todd Park, who now serves as chief technology officer of the U.S. Prior to founding Castlight, Colella was founder, president and CEO of RelayHealth, which he later sold to McKesson.
The $100,000 funding in back in 2012 included participation from two major unnamed mutual funds, as well as T. Rowe Price, Redmile Group and previous investors. The previous round of funding included Morgan Stanley Investment Management, and the Wellcome Trust, U.S. Venture Partners, as well as Cleveland Clinic, Maverick Capital, Oak Investment Partners and Venrock.
[See also: Castlight lands $100M in funding.]
"The healthcare industry is in dire need of innovation," said Bryan Roberts, partner at Venrock and co-founder and chairman of Castlight Health, at the time. "Castlight has the opportunity to dramatically improve the efficiency of the U.S. healthcare system, providing employers and consumers with the information required to make good cost and quality healthcare decisions. Over the last two years, Castlight Health has created the unique products to drive customer traction and ROI, which sets them on a terrific growth trajectory over the next several years."