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0/ $IPOC announced the acquisition of Clover Health for $3.7B inclusive of a $400M PIPE (w/ $100M from @chamath). This values the company at 4.2x EV/Rev & 2.1x '23 revenue. Importantly management is rolling over 100% of their equity
1/ The Medicare Advantage ("MA") Market is expected to grow from $270B in '19 to $590B in '25 as 10,600 baby boomers join MA every day.
2/ Clover is the fastest growing MA plan in the US with 57K members, 34 countries, 4.5x LTV/CAC.
3/ Clover offers a "true payor / provider partnership model." Through the use of data they enable high-quality personalized care; increasing access & benefits while reducing costs. Clover enables faster payment w/ 2x industry reimbursement rates & just 4 days for the avg payment
4/ Clover was the fastest growing MA plan with at least 50,000 members. They have a Top 3 market share position in established markets, >50% take rates, and 600bp retention advantage vs. peers.
5/ The Clover Assistant delivers data-driven insights to physicians at the Point of Care. They are able to combine PCP & Specialist Charts, with a variety of data sources & evidence-based protocols to provide actionable data.
6/ It's still early as they are in 34 counties representing 3.1M MA Lives. In those counties they have 25% mkt share w/ 57K members, 8% market share, & $664M of gross premium revenue.
By '21E they expect to be in 108 counties representing 4.4M MA lives & $872M of gross premium.
By '21E they expect to be in 108 counties representing 4.4M MA lives & $872M of gross premium.
7/ They believe there is a path to $25B in revenue with 28M MA lives, if they were in 40% of US markets & had 12% market share.
For comparison publicly traded $HUM is the largest player in this market has has $62.9B in premium & annuity revenue
For comparison publicly traded $HUM is the largest player in this market has has $62.9B in premium & annuity revenue
8/ In terms of financials gross premium revenue has growth at a 37% CAGR from $354M in '18 to a $664M run-rate in 1H20. Their EBITDA margin is now (-1.0%) up from (-50.1% in '18).
9/ They walk out a path to profitability by '23E on what seems to be realistic assumptions based on their recent 3 year track record; with the growing market.
10/ There's been a lot of confusion in the market over what pro-forma ownership looks like for a SPAC. They break it out showing existing Clover S/H will own 67.6% of the company with $IPOC s/h owning 18.7%, the PIPE owning 9.0%, ad the IPOC sponsors at 4.7%.
11/ If we look at the last 2 deals @chamath has done with $IPOB & $IPOC it's clear he's elephant hunting from a market perspective looking at RE & HC; two incredibly large TAM's with limited technical disruption.
Will be fascinating to see $IPOD, $IPOE, $IPOF-Z.
Will be fascinating to see $IPOD, $IPOE, $IPOF-Z.
12/ @chamath is making the bull thesis on CNBC & noted that he continues to look for virtuous cycle outcomes that occurs when you combine technology with a great market & scale you can build durable moats & a defensible business thats hard for laggards to compete with.
13/ Talking about the MA market it's growing at a $1.0B/week & @chamath said he has never had visibility to a market with this defined & measurable growth.
