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Sword Health's road to IPO

Jun 4, 2024
Illustration of a person using an exercise band made from $100 bills.

Illustration: Gabriella Turrisi/Axios

Sword Health, a digital musculoskeletal care company, raised $130 million in unlabeled funding, with expectations to reach profitability at year-end, CEO Virgílio Bento tells Axios.

Why it matters: The company, now valued at $3 billion, is well positioned to pursue its long-awaited IPO as soon as 2H25, Bento says.

Inside the room: Bento has been conversations with bankers and investors and is eyeing an IPO in the second half of 2025 or early 2026.

  • "When we go public, it will be internally driven and not external, despite receiving material interest from the market," Bento says.
  • He declined to comment when asked about potential public comps.

Catch up quick: The fundraise is a mix of $30 million in new financing and $100 million in secondary funding to offer liquidity to employees and early investors.

  • This brings the total funding to $340 million to date, and represents a nearly 50% spike from Sword's $2 billion Series D valuation in 2021.
  • Sword declined to disclose exact investors, but confirmed it was a mix of new and current. Series D investors included Sapphire Ventures, Sozo Ventures, Willoughby Capital, General Catalyst and Khosla Ventures.
  • Sword declined to label the round, because, per Bento, "After Series B, naming the rounds stops having meaning."

How it works: Founded in 2014, NYC-based Sword's offerings are sold to employers, and it connects members with physical therapists 24/7 as needed.

  • It provides wearable technology to monitor movement, prevent injury and capture data during exercise, as well as educational content.
  • The company in 2022 created Bloom, a separate offering leveraging motion sensor-based technology to address and relieve pelvic pain for women.
  • Bento declined to comment on other verticals the company plans to penetrate.

The latest: The company Tuesday announced an AI solution called Phoenix that patients can speak with for guidance through virtual physical therapy sessions.

The big picture: Digital health has had a long, hard fall from grace after several companies pursued public offerings at lofty valuations they couldn't grow into.

  • Bento says that aside from liquidity, Sword pursued this recent round to validate a more reasonable valuation.

💭 Our thought bubble: There aren't any true public comparables Sword can look at — and that, combined with the uncertainty that's rocked the sector in recent years, could make it difficult to identify a rational public valuation.

State of play: The digital MSK space is crowded and competitive, as Sword joins Tiger Global-backed rival Hinge Health in the race to the public markets.

  • Meanwhile, smaller-scale startups like Kaia Health and TailorCare have also raised VC funding and could be acquisition targets for scaled players, per a PitchBook report.
  • Insight Partners-backed ViewFi recently partnered with buzzy employee benefits navigation startup Transcarent, backed by Glen Tullman.
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