Clover Health, a healthcare company that uses data analysis and preventive care to improve health for seniors, has decided to go public via a merger with Social Capital Hedosophia Holdings. The deal values it at $3.7 billion. Social Capital is a venture capital firm based in Palo Alto, California specializing in technology start-ups, venture capital, private equity, and providing seed funding.
This is the third Special Purpose Acquisition Company (SPAC) deal by Chamath Palihapitiya, the CEO of Social Capital, the others being Opendoor and Virgin Atlantic. He has attracted a significant amount of attention in recent months for his leadership in SPACs and controversial commentary on financial markets.
While Clover health has been driven by technology, in the last few years, it has come to understand that technology alone isn't sufficient to sustain the company. This led to a major pivot last year that resulted in layoffs for almost a quarter of its workforce and a renewed focus on hiring more health care experts rather than technology experts.
Cash from this deal will be used to help Clover grow its current operations beyond 57,000 members across seven states, which is expected to achieve profitability by 2023. This deal includes up to $1.2 billion in cash proceeds, $400 million of which will be provided by a Palihapitiya-led private investment.