By Rex Crum, MarketWatch
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SAN FRANCISCO (MarketWatch) — Castlight Health Inc. shares soared almost 150% Friday on a strong reaction to the public debut of the cloud-based health care software company.
Castlight /zigman2/quotes/201298689/composite CSLT +5.95% ended the day up by $23.80 at $39.80 after the company went public by selling 11.1 million shares of stock at $16 each. Castlight had originally priced its IPO in a range of between $9 and $11 a share.
The company’s software is used by businesses to improve their spending on health care and reduce waste in what Chief Executive Giovanni Colella called “the only industry in America that’s been failed by capitalism.”
Colella said that of the $620 billion that U.S. businesses spend on health care, about 30% is wasted on incorrect coverage plans and benefits for employees.
“Health care [costs] are a major problem because the data used is all over the map,” Colella said. “It’s an industry with a lack of transparency. We create a software [platform] that provides a look at the system and is designed in a consumer friendly way.”
Castlight went from 45 customers at the end of 2012 to 106 a year later. Colella said the company intends on using proceeds from its IPO to be “very aggressive” in building up its market share in the cloud-based health care software industry.