Why was Castlight valued at $1.4B with only $13M in revenue?

The 2014 US tech IPO market was pricing category leadership in healthcare technology at extraordinary multiples. The ACA had created interest in healthcare cost transparency and Castlight was the dominant company in the category. The market was betting on the category's future rather than the company's current economics. The bet did not pay off at the scale priced.

What was Castlight's actual product?

A Software as a Service platform sold to large employers that gave their employees a portal to compare healthcare costs, find in-network providers, and navigate their benefits. The platform integrated with employer HR systems and health plan data to provide personalised cost and quality information. It was genuinely useful for employees who actively used it — the problem was that most employees did not.

Does healthcare cost transparency still have a market?

Yes. The Hospital Price Transparency Rule mandates that US hospitals publish their prices, and multiple companies continue to build cost transparency tools. The market exists but the engagement dynamics Castlight faced persist: most patients seek care based on physician referral and convenience, not cost comparison.

← All autopsies

// HALL OF FLAME · STARTUP AUTOPSY

Founded	2008
Closed	2023
Country	USA
Sector	Healthtech
Total raised	178
Collapse type	Acqui-hire
Founder	Giovanni Colella, Todd Park, Bryan Roberts

Castlight Health

"The $1.4B healthcare transparency IPO that proved benefits platforms are worth a fraction of what Wall Street paid for them"

$178M

RAISED

—

EMPLOYEES

180

MONTHS

timingAcqui-hire

// Fatal mistake: Listed at $1.4B on $13M revenue on the strength of category narrative, then failed to grow fast enough to justify the multiple as employee engagement with benefits navigation platforms remained structurally low.

Key Events Timeline

2008-01

FOUNDING

Castlight Health founded to provide benefits navigation and price transparency for high-deductible health plans

2014-03

FUNDING

IPO at $1.4 billion valuation on $13 million annual revenue; stock doubles to $40+ on first day of trading

2018-06

DOWN ROUND

Stock price begins sustained decline as growth expectations fail to materialize; low employee engagement with benefits navigation platform becomes evident

2022-01

PIVOT

Castlight Health merges with Vera Whole Health to form Transcarent as stock collapses 99% to under $0.40 per share

2023-06

ACQUISITION ATTEMPT

Castlight Health ceases operations; business wound down as Transcarent focuses on integrated care model

🔥 Hall of Flame 55%🏆 Hall of Fame 42%

Castlight Health launched in 2008 with a solution to a real problem: employees with high-deductible health plans needed help navigating the complexity of healthcare costs and making informed decisions about where to receive care.

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More Healthtech →More from USA →More timing failures →Raised: 178

// YOUR STARTUP DOESN'T HAVE TO END LIKE THIS

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// THE HEALTHTECH GRAVEYARD DOESN'T END HERE

Castlight Health followed a documented pattern. Identify the same signals in any company before they reach the point of no return.

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