Insurtech Bright Health Secures $750 Million Investment
MINNEAPOLIS //BestWire// - Bright Health Group Inc. has announced a $750 million financing to support the company’s continued growth.
The financing includes a strategic investment by Cigna Ventures, a wholly owned subsidiary of Cigna Corp., as a new investor in the company.
New Enterprise Associates, Bright Health’s largest existing shareholder, also will participate as a co-investor, the company said. Under the terms of the investment, Cigna and NEA will collectively purchase $750 million of convertible perpetual preferred stock with a purchase price of $1,000 per share, which will carry a 5% dividend and can be converted to common stock in the future.
“Cigna Ventures is committed to improving and expanding access to quality, affordable health care, and our investment in Bright Health Group aligns with our vision,” said Tom Richards, head of Cigna Ventures. “We seek to be partners of choice and we look forward to exploring new ways that NeueHealth and Evernorth can potentially provide services to each other’s customers and clients.” The investment is also backed and partially funded through Cigna.
In September 2020, Bright Health Inc. announced a $500 million funding round with what the health insurtech calls “significant investments” by funds and accounts advised by Tiger Global Management, T. Rowe Price Associates and Blackstone (BestWire Sept. 22, 2020).
“The investment from Cigna and NEA signifies continued conviction in Bright Health Group’s alignment model,” said Mike Mikan, president and chief executive officer of Bright Health Group. “We are excited about the partnership opportunities for both Bright Health Group and Cigna to bring affordable, personalized health care to all consumers.”
A recent Best’s Special Report said Bright Health has built a proprietary software platform aimed at lowering costs by improving care coordination between providers. Bright Health is actively marketing its software platform to providers under the brand NeueHealth.
Bright Health is not currently rated by AM Best. Underwriting entities of Cigna Corp. have current Best’s Financial Strength Ratings of A (Excellent).
Shares of Bright Health Group (NYSE: BHG) closed at $3.78 on Dec. 6, up 12.5% from the previous close. Shares of Cigna Corp. (NYSE: CI) closed at $206.59 on Dec. 6, up 3.89% from the previous close.
(By Terrence Dopp, senior associate editor, Best’s Review: Terry.Dopp@ambest.com)