Omada Health Files to Go Public: Will It Be Successful?

After years of limited activity, the digital health sector is finally showing signs of life in the public markets.

Only a few companies have filed to go public in recent years, including Waystar and Tempus AI. And many of those who have gone public have struggled. For example, Accolade, which went public in 2020, has gone private again after being acquired by Transcarent. 

But last Friday, Omada Health, a chronic condition management company, filed for an Initial Public Offering (IPO). It’s the second major digital health company to do so this year, following musculoskeletal company Hinge Health in March. 

San Francisco-based Omada Health launched in 2011 and offers virtual support for diabetes, hypertension and joint and muscle health. It works with employers and health plans, serving more than 2,000 customers, and has about 1 million members enrolled, according to its S1. It has also experienced “strong growth:” revenue increased by 38% from $122.8 million in 2023 to $169.8 million in 2024, the S1 stated. It has raised nearly $530 million in total, according to CBInsights.

So will Omada Health be successful in its quest to go public? One industry follower, Christina Farr, managing director at consulting firm Manatt Health, noted in her newsletter called Second Opinion that the company is seeing good engagement and customer satisfaction. In addition, it has a lot of programs, including diabetes, musculoskeletal, weight management and hypertension. This is beneficial as employers want to steer away from point solutions, Farr stated.

A tailwind could also be the increased popularity of GLP-1s, according to Farr. The company itself doesn’t prescribe GLP-1s, but it offers lifestyle support for people who are taking them. Though a headwind may be the fact that the company hasn’t seen much traction in the Medicare market, she added.

Another healthcare expert noted that this is positive news that the “dam is breaking” with the lack of recent digital health companies going public. Omada’s revenue growth is interesting, though it’s still losing a lot of money, stated Michael Greeley, cofounder and general partner of Flare Capital Partners. It had a net loss of $47.1 million in 2024, and an accumulated deficit of $444 million, according to the S1.

“They have to be very confident that the next several quarters, they really have a good handle on the growth trajectory, and that the company will get to profitability,” Greeley said in an interview. “Otherwise, if the numbers deteriorate as a public company they could end up being very much penalized. The stock could really, really tank.”

A key signal of success in Omada Health’s move to go public is whether Fidelity Management & Research Company and Wellington Management, which are big mutual funds that invested in the company’s Series E round, invest in the IPO, Greeley added.

“You’ll want to see that there’s a lot of insider support, and that underscores the conviction that it’s a fundamentally good business. When they’re losing so much money, there will just be a lot of questions on, how does this thing converge to be profitable? If the existing investors are big buyers in the IPO, that’s a really positive sign,” he said.

It’s also worth noting that the decision to pursue an IPO is a sign that it’s currently a better route than selling the company in today’s market, Greeley said. He said that typically, selling the company, such as to a large insurance company or tech company, is better than going public.

“When you’re public, you’re locked up for six months,” he stated. “You are now under really bright lights of the public market, and it’s been brutal on the healthcare tech companies the last three or four years. Those that went public are trading incredibly low valuations. Versus a private sale of the company, it’s a negotiated transaction. It’s not under the scrutiny of the public markets, and it’s oftentimes not disclosed. So it feels like there’s a signaling there that in this market, IPO is gonna be more attractive, relatively speaking, than a sale to a company.”

In other words, bankers are signaling that the sale path is coming at a price lower than what the company will get going public.

Greeley expects to see several other companies file to go public in the near future, such as musculoskeletal company Sword Health, weight loss and diabetes company Virta and online healthcare marketplace Zocdoc.

However, there are still some unanswered questions when it comes to digital health companies in the public market, according to another industry follower.

“An IPO might be an exit for early investors, but it’s just the start for companies like Omada, Hinge Health and others who are seeking to prove digital health can mature and really achieve meaningful scale. … Can tech-enabled digital health services companies like Omada and Hinge truly scale and remain standalone success stories? How will traditional healthcare incumbents respond?” said Seth Joseph, Summit Health Advisors founder and managing director, in an email.

Omada Health declined to comment.

Photo: Chunumunu, Getty Images