Sword Health Secures $85M Series C for Virtual MSK Care

SWORD Health Secures $85 Million in Series C Funding

SWORD Health, a platform delivering virtual care for musculoskeletal (MSK) conditions, was established in 2015. The company recently announced the successful completion of an $85 million Series C funding round. General Catalyst spearheaded this investment.

Investment Details and Participants

Alongside General Catalyst, several other investors participated in this funding round. These include BOND, Highmark Ventures, BPEA, Khosla Ventures, Founders Fund, Transformation Capital, and Green Innovations. This capital injection follows a $25 million Series B raise just months prior.

Consequently, the New York-based company has secured a total of $110 million in funding within a six-month timeframe.

Rapid Funding and Growth Strategy

Virgílio Bento, CEO and founder of SWORD Health, indicated that the company hadn’t been actively seeking investment when discussions began. The Series C round was finalized remarkably quickly – within three weeks of receiving the initial commitment from a leading investor.

Bento explained that favorable market conditions, attractive valuations, and the opportunity to collaborate with prominent investors who could accelerate growth were key factors in their decision to raise additional funds.

Booming MSK Digital Health Market

This substantial funding arrives during a period of significant expansion within the MSK digital health sector. The increasing adoption of virtual care solutions is driving growth for venture-backed companies like Kaia Health and Hinge Health.

Kaia Health experienced a 600% business increase in 2020, while Hinge Health achieved a valuation of $3 billion. SWORD Health, though founded in 2015, has only been actively operating in the market for 18 months.

While Bento refrained from disclosing the company’s precise valuation, he confirmed it exceeds $500 million.

Addressing the Prevalence of MSK Conditions

Musculoskeletal conditions are incredibly common, encompassing a wide range of issues from minor sprains to more serious problems like disc compression. The widespread nature of these conditions has spurred innovation in solutions aimed at reducing reliance on surgery or opioid pain medication.

SWORD Health’s Approach to Virtual Care

SWORD Health’s platform provides access to virtual physical therapists through traditional telemedicine. Furthermore, patients receive a tablet and motion sensors.

These tools enable patients to perform exercises and receive real-time feedback and guidance from a SWORD Health Digital Therapist.

Market Position and Competition

SWORD Health currently serves insurers, health systems, and employers across the United States, Europe, and Australia.

Hinge Health, valued at $3 billion, represents SWORD Health’s primary competitor. However, Bento expressed confidence in his company’s distinct approach.

Differentiating Factors and Future Investment

Bento highlighted SWORD Health’s four-year investment in developing its sensor technology, contrasting it with what he described as Hinge Health’s initial launch of a less refined sensor solution.

Notably, Hinge Health acquired medical device maker Enso in March 2021 to enhance its musculoskeletal therapy technology and currently holds the largest market share among private startups in this sector.

SWORD Health has reported a 1,000% year-over-year increase in treated patients and a 600% year-over-year revenue growth. These metrics, while impressive, reflect the company’s recent growth trajectory as an early-stage venture.

With the new funding, Bento intends to prioritize further investment in the platform, rather than immediate profitability.

“Our focus is on solving a significant problem, and we aim to reinvest all generated gross profit into building a platform that delivers increased value to patients,” he stated.