Hinge Health, a digital physical therapy company, concluded its first day of trading on the New York Stock Exchange with its stock closing at $37.56, reflecting a 17% increase over the $32 initial public offering (IPO) price set the previous day.
This initial performance was positive; however, Hinge Health’s public valuation remains significantly lower than its last private market valuation. The company, founded 11 years ago, reached an approximate market capitalization of $3 billion, excluding employee options, which is less than half of the $6.2 billion valuation it achieved during its Series E funding round in October 2021, led by Tiger Global Management.
In recent times, the perception of down-round IPOs has shifted, and the stigma associated with going public below the last private valuation has diminished, particularly for valuations from the 2020-2021 period.
Examples of companies with IPOs priced below their previous private valuations include Reddit, which debuted at approximately $5.4 billion, roughly half of its $10 billion valuation from 2021. Similarly, ServiceTitan’s IPO valued it at about $6.3 billion, lower than the $7.6 billion valuation from its Series H round two years prior.
Hinge Health’s IPO generated $437 million, with $237 million going directly to the company and the remaining proceeds benefiting its existing investors. Insight Partners and Atomico are the largest external shareholders, holding 19% and 15% of the stock, respectively. Other venture capital firms, including 11.2 Capital, Coatue, Tiger Global, and Bessemer Venture Partners, collectively own around 8% of the shares, according to the company’s latest S-1 filing. Co-founders Daniel Perez and Gabriel Mecklenburg hold 18.9% and 8.2% of the shares, respectively.
The company focuses on reducing musculoskeletal pain through the use of wearable sensors and computer vision technology, monitored remotely by a clinical care team of physical therapists, physicians, and board-certified health coaches.
Omada Health, another digital health company, filed to go public earlier this month. Omada Health, a 13-year-old startup, provides virtual care for chronic conditions such as diabetes and hypertension and competes with Hinge Health in the musculoskeletal pain reduction field. Major shareholders of Omada include U.S. Venture Partners and Andreessen Horowitz, with a 2022 valuation exceeding $1 billion.
Hinge Health’s primary competitor is Sword Health, which was valued at $3 billion about a year ago. Sword Health’s CEO, Virgilio Bento, stated that the company might pursue an IPO in 2025 if it meets growth expectations and the macroeconomic situation is favorable.
