Clover Health In Talks to Go Public Via Social Capital III

(Bloomberg) — Clover Health, an insurance startup backed by Alphabet Inc. and Sequoia, is in advanced talks to go public through a merger with blank-check company Social Capital Hedosophia Holdings Corp. III, according to people familiar with the matter.

A deal could be announced as soon as this week, said the people, who asked not to be identified as the information is private. Social Capital III, backed by venture capitalist Chamath Palihapitiya and longtime investor Ian Osborne, raised $720 million in an upsized initial public offering in April.

Negotiations are ongoing and could still be delayed or fall apart, the people said. Representatives for Clover Health and Social Capital III declined to comment.

Clover Health raised about $500 million in a round led by existing investor Greenoaks Capital in January 2019, TechCrunch reported at that time. The startup offers Medicare Advantage plans in 34 counties across seven states in the U.S. for 57,000 members, according to a press release in July. The firm plans to expand the coverage to another 74 counties.

Social Capital, the partnership between Palihapitiya and Osborne, raised its first special purpose acquisition company in 2017. It’s ramping up its offerings amid a surge in popularity for the investment vehicles. SPACs provide a faster route for companies seeking to gain a listing without the scrutiny or risks of an initial public offering.

The partnership is seeking to raise at least $2 billion for three new blank-check companies, according to filings last month that confirmed a Bloomberg News report.

Social Capital Hedosophia Holdings Corp. II, another blank-check company by the partnership, agreed to merge with property technology Opendoor last month. Social Capital’s first SPAC merged with billionaire Richard Branson’s space company to form Virgin Galactic Holdings Inc.