Livongo Health

Performance Indicators

2018: Growth of revenue twice — to $68.4 million

In 2018 revenue of Livongo made $68.4 million that more than twice exceeds an indicator of year prescription. At the same time net losses of the company increased from $16.9 million to $33.4 million.

History

2020: Teladoc Health purchased Livongo Health for $18.5 billion

At the beginning of August, 2020 Teladoc Health announced acquisition of the supplier of telemedicine services of Livongo Health. Within the transaction the company was estimated at $18.5 billion, having relied on a boom of online therapy and consultations in connection with a coronavirus pandemic.

It became the largest investment of Teladoc since 2017. The company long time bought up small firms and thanks to this approach became the leading supplier of telemedicine services in the USA. Analysts consider that using the last transaction the Teladoc consolidated company can become the indisputable leader both in the field of rendering urgent telemedicine services, and in the field of remote treatment of chronic diseases. The transaction completely corresponds to the order of the president Donald Trump on expansion of access to telemedicine for 57 million Americans.

However the stocks Teladoc fell as analysts asked a question whether the company was excessively optimistic about Livongo which stocks this year rose 477% against the background of a pandemic.

The telemedicine company Livongo is sold to Teladoc Health for $18.5 billion

Banks consider that the paid price is too high, - the analyst of Verity Research research firm David Larsen was recognized.

Anyway, the transaction will provide to clients of Livongo who usually study physical therapy and other preventive methods of treatment of chronic diseases under the leadership of trainers, direct access to doctors who can write out them recipes. By estimates of analysts, customer bases of Teladoc and Livongo companies match less than for 25%.

Shareholders of Teladoc will pay for one stock Livongo 0.59 of the action and $11.3 cash, thereby the gain to Livongo share value at biddings will make 10%. Shareholders of Teladoc will own 58% of stocks of the united company which will still be called Teladoc Health, present shareholders of Livongo will have other actions in hands.^[1]

2019

Entry into the exchange: growth of quotations on 36%, capitalization — $3.6 billion

On July 25, 2019 Livongo Health  made the IPO. The company placed the shares on the Nasdaq exchange under a ticker of LVGO.

Service for control of chronic diseases set IPO price range at the level of $24–26 for an action. On the eve of the beginning of biddings the mark was raised to $28. Selling 12.7 million securities at such cost, the company attracted $355 million.

To opening of the exchange on July 25 the quotation rate of Livongo made $40.51, and to the end of biddings it stopped at the level of $38 that is 36% more than the final price of the IPO. In the course of trade growth rates of quotations reached 62%, notes CNBC TV channel.

The service for control of chronic diseases went public

In the first day in the status of the public company market capitalization of Livongo made $3.6 billion.

As of  June 30, 2019 on  the Livongo Health platform more than 192 thousand users and  720 companies from  which 20% are included into the rating of the largest of Fortune 500 were registered. 

Livongo claims that use of service reduces costs on  treatment of diabetes on  21.9% ($88 a  month), thanks to careful control of  sugar level in  blood, to weight reduction and  the general improvement of health. On average clients of the company save up to $1900 a  year. 

At first Livongo specialized only in diabetes, but by July, 2019 controls also other diseases, including a hypertension and also a mental status of patients.

According to investors, the IPO of the startups providing services in maintaining the patient have a high potential. These services are on sale to the large companies and medical institutions.

By Rock Health estimates, in 2018 the companies which are engaged in digital medicine attracted in total more than $8.1 billion the venture funding.^[2]

Integration into wearable devices of Apple, Fitbit and Samsung

At the end of June, 2019 the Livongo company, the developing service for control of chronic diseases, announced bilateral integration of the application into wearable devices of Apple, Fitbit and Samsung. Thus, some Livongo functions became available in popular models of the smartwatch.

Certain models of hours Apple Watch, Fitbit and Samsung Gear will display reminders which induce the user to carry out certain tasks for improvement of health. Besides, users can achieve particular behavioural purposes using more difficult tasks distributed for several days. Change of habits is capable to provide long-term advantage for health, and an AI system will support the user on this way using target educational resources and content.

Apple Watch is controlled now by chronic diseases

Addressing popular consumer devices, Livongo aims to increase convenience of proprietary applications on change of behavioural habits. Besides, integration is bilateral will allow Livongo to collect data written by sensors of the smartwatch. For example, if the user loads data of a pedometer into the application, Livongo will immediately recustomize the program and notifications.

The president of Livongo Jennifer Schneider emphasized that integration into the smartwatch allows not only to collect information from participants, but also to return them it in the form of the effective, personalized and timely recommendations.

It is not the first step of Livongo to wider consumer market – at the beginning of April, 2019 the company issued for Amazon Alexa one of the first applications for health which completely corresponded to the law of the USA on availability of health insurance and the personified accounting in health care and also published data on the cooperation with Eli Lilly.^[3]

Notes