• Digital health company Livongo is set to start trading Thursday under the ticker "LVGO."
  • The company priced its shares at $28 apiece late Wednesday. Livongo is selling about 12.7 million shares, raising $355 million.
  • The IPO values the company at about $2.5 billion.
  • Livongo's offering is part of a wave of digital health companies entering the public markets after a three-year drought.

Livongo, a company that uses technology to help take care of patients with diabetes, is set to go public as part of a wave of digital health IPOs.

The company priced its shares at $28 apiece late Wednesday, giving it a market value of about $2.5 billion. Livongo, based in Mountain View, California, is selling 12.7 million shares, raising $355 million. The stock is set to start trading tomorrow on the Nasdaq.

Health Catalyst, a Utah-based healthcare software company, is also expected to start trading on Thursday, after pricing its IPO at $26 a share, raising $182 million and valuing the company at $1 billion.

Livongo and Health Catalyst join a slew of health-tech IPOs this year. Already, the healthcare software company Phreesia started trading earlier this month, after raising $167 million in its IPO. Change Healthcare, a Nashville, Tennessee-based revenue-cycle-management software company, spun out of the healthcare giant McKesson in June. It's currently trading at about $14 a share, after pricing its offering at $13.

At least two other digital health companies are reportedly gearing up for initial public offerings this year, according to news reports: the DNA-testing company Ancestry and the clear-aligners company SmileDirectClub.

Livongo was founded in 2014 and operates programs to help care for people with diabetes and other chronic diseases using a glucose meter and other devices. Typically, big companies and insurers pay monthly fees for the care. Livongo's bet is that by using technology, coaching, and other tools, it can manage those chronic conditions better and ultimately at a lower cost.

Before the IPO, Livongo had raised $237 million from investors and was valued at $800 million.

According to the IPO filing, Livongo has been growing quickly, though its financial losses are deepening. The company generated $68.4 million in revenue in 2018, more than double the $30.8 million it made in 2017. Its net loss widened from $16 million in 2017 to $33 million in 2018.

As of March, the company had 164,000 members in its largest program, to treat diabetes. About 29 million Americans are known to have one of the two types of diabetes, of which most have Type 2, in which the body has a hard time breaking down sugar in the blood and which is often lifestyle-driven.

A wave of digital health IPOs ends a drought,

Before this wave of public offerings, the most recent digital health IPO came in 2016, when the cardiac-monitoring company iRhythmwent public. Private health-tech companies have racked up big valuations in recent years, but few have gone public.

The IPOs come at a critical time for the digital-health market. Startups looking to apply technology to the healthcare industry raised about $14 billion in 2017 and 2018 combined from investors, and that seems to be keeping up in 2019. According to figures compiled by Rock Health$4.2 billion was invested in digital healthin the first half of 2019, on track to potentially beat out 2018's record-breaking funding year.

Much of the activity in the digital health space in the past 15 years has been centered around the electronic health record market, according to Hemant Taneja, a managing partner at General Catalyst and board member at Livongo. More recently, investors have been pouring money into companies that have business models like Livongo, in which technology is used to help patients manage their care more directly.

"Truly organizing healthcare online, which, we think of that as the internet moment of healthcare, that's now just starting to happen," Taneja said. To him, the internet moment of healthcare is having a product that makes you forget -- as much as possible -- that you're taking care of your diabetes.

--This post originally appeared on Business Insider.