Evidence is mounting that 2019 is going to be the year of the digital health IPO, and the latest to run up that flag is Phreesia, a digitial health company that has been quietly innovating in the patient check-in space for more than a decade.

New York City-based Phreesia announced today the filing of its S-1 form with the SEC, though the number of shares being offered and their initial value are as-yet unannounced. It will be trading under the symbol PHR. J.P. Morgan, Wells Fargo Securities and William Blair are acting as joint book-running managers for the proposed offering, with Allen & Company LLC and Piper Jaffray on board as passive book-running managers.

WHAT THEY DO

Phreesia was founded in 2005 by CEO Chaim Indig and COO Evan Roberts, both of whom are still leading the business 14 years later. The company's initial and primary focus is on patient intake; its flagship product, the PhreesiaPad, is a bespoke rugged tablet deployed in waiting rooms and used to check in patients.

Over the years, the company has expanded into other areas including payment, appointments, patient surveys, clinical support, and more. And despite initial hesitance to move from hardware into software, the company introduced PhreesiaMobile, an app play that allows patients to begin the check-in process at home using their own devices, in 2017. They also have a kiosk-based offering.

The company consistently comes up as an example of EHR integration and leveraging APIs for interoperability.

Phreesia has raised more than $100 million over the years according to SEC docs, most recently in 2017 when the company added another $34 million in a round led by Echo Health Ventures. Notably, Blue Cross Blue Shield Ventures is an early investor in the company.

"In fiscal 2019, we facilitated more than 54 million patient visits for approximately 50,000 individual providers, including physicians, physician assistants and nurse practitioners, in nearly 1,600 healthcare provider organizations across all 50 states," the company writes in its S-1. "Additionally, our Platform processed more than $1.4 billion in patient payments during this time."

Phreesia quietly acquired another digital health company, Vital Score Health, in late 2018 for an undisclosed amount.

WHY IT MATTERS

Phreesia provides a counterpoint to the prevailing narrative of recent IPOs like Uber and Lyft, massively funded unicorns that have grown quickly and remain unprofitable. Instead, the 14-year-old company seems to embody Aesop's tortoise, slowly and steadily winning the race. On top of that, it's a hardware company, which is something of a liability in conventional startup wisdom.

According to the company's SEC docs, it's also bringing in a good deal of revenue and has recently begun turning a profit.

"Based on the significant value we provide to our clients, we have experienced strong organic revenue growth over the last two fiscal years," the company wrote. "Total revenue increased approximately 25% from $79.8 million in fiscal 2018 to $99.9 million in fiscal 2019. For the three months ended April 30, 2018 and 2019, our revenue was $23.9 million and $28.3 million, respectively. Adjusted EBITDA increased from a loss of $4.1 million in fiscal 2018 to income of $3.5 million in fiscal 2019."

Phreesia also divulged some information about its business model and how that model positions the company for further growth.

"Our revenue is largely derived from recurring monthly subscriptions and re-occurring payment processing fees, which should increase with growth of our client base and the ongoing shift of healthcare costs to patients," they wrote. "We have successfully expanded our products sold to existing clients by adding incremental providers and offering additional solutions to these clients. This has led to a 26% increase in average revenue per provider client from fiscal 2018 to fiscal 2019. As our provider clients continue to add more providers to our Platform, we benefit from increased scale and strong unit economics. Our highly recurring revenue and strong client retention is evidenced by our 107% annual dollar-based net retention rate for provider clients in fiscal 2019."

WHAT'S THE TREND

After a three-year drought in digital health IPOs, the field seems poised for a comeback with as many as five this year. Along with Phreesia, other potentially upcoming offerings include chronic disease management startup Livongo, health IT analytics firm Change Healthcare, health data storage company Health Catalyst, and connected exercise bike and treadmill company Peloton.

At a time when many big tech companies are looking to move into various areas in healthcare, the IPOs are a promising sign that some established companies in digital health see bright futures for themselves as independent — and transparent — public companies.