The hot healthcare startup Oak Street surged to a $9.5 billion valuation in its IPO. Here are the investors and execs who stand to make the most. (2024)

Founded in 2012, Oak Street has 260 primary care doctors in its 54 centers, managing the health of 85,000 patients.

The IPO exposes a hot upstart that aims to transform healthcare to the scrutiny of public markets. It follows clinic operator One Medical, which went public in January, and has surged since its stock-market debut.

In its filing, Oak Street listed the top shareholders in the company and their stakes:

• General Atlantic, a private equity firm, owns 34% of Oak Street or 76.4 million shares going into the IPO. At close, that stake was worth nearly $3.1 billion.
• Newlight Partners,a private investment firm, owns 23% of Oak Street, or 50.4 million shares going into the IPO. That stake is now worth $2 billion.
• Humana,the health insurer, owns 5.7% of Oak Street. Its 12.7 million shares are now worth $508 million.
• Mike Pykosz, 38,is a cofounder and the CEO and chairman of Oak Street. He owns 9.4 million shares of Oak Street, or 4.2% going into the IPO, a stake worth $377 million.
• Geoff Price, 38,a cofounder and the chief operating officer, owns 7.8 million shares of Oak Street, or 3.5% going into the IPO. Price's stake is worth $313 million.
• Dr. Griffin Myers, 39, a cofounder and the chief medical officer, owns 6.5 million shares of Oak Street, a 2.9% stake going into the IPO. His shares are worth $260 million.

Investors are betting big on primary care

Oak Street's IPO adds to an eventful year for privately held primary-care companies. In February, Medicare Advantage-focused Iora Health raised an additional $126 million from investors. In July, Walgreens made a $1 billion bet on primary care company VillageMD, with plans to open 500-700 doctors offices at Walgreens' pharmacies over the next three years.

The intense interest in primary care comes as the coronavirus pandemic creates massive challenges for every part of the healthcare industry. Healthcare workers are facing layoffs, furloughs, and reassignments, even as hospitals were overwhelmed by COVID-19 patients. Primary care practices that are paid based on the number of patients they see in a given day have seen heavy financial losses, while those that are working to get paid a large fixed sum each month to take care of all of a patient's health needs haven't seen the same hit.

Chicago-based Oak Street is aiming to be in the latter group, striking contracts with health insurers to provide primary care to seniors, in particular those who are eligible for both Medicare and Medicaid. It works with Medicare Advantage health plans and those on traditional Medicare to get paid to manage the health of members, by driving them to and from appointments, and offering them social events and more time with their doctors.

Oak Street made $201.8 million in revenue in the first quarter of 2020, up from the $117.4 million it brought in between January and March 2019. For the full year 2019, Oak Street's revenue was $556.6 million, up from $317.9 million in 2018.

The company's net losses deepened as the company grew, the filing shows. From 2018 to 2019, losses widened from $79.5 million to $107.9 million. In the first quarter of 2020, Oak Street's net loss was $15 million.

This article has been updated with Oak Street's closing stock price on Thursday.