- Physical therapy startup Hinge Health has officially filed to go public.
- Tiger Global-backed Hinge would be the first healthcare delivery startup to IPO in three years.
- Here are our three key takeaways from Hinge Health’s 250-page S-1 filing.
Hinge Health has officially filed to go public.
The physical therapy startup filed its S-1 for an initial public offering on Monday, tapping investment banks Morgan Stanley, Barclays, and Bank of America on the deal.
If Hinge Health goes through with its IPO, it’ll be the first healthcare delivery startup to do so in nearly three years. The public markets have been mostly closed for healthcare startups since the industry’s last wave of IPOs in 2021 after the companies that went public in that cycle didn’t put in a strong showing.
The San Francisco-based company, which launched in 2014 to provide virtual care for joint and muscle pain, would trade on the New York Stock Exchange under the ticker “HNGE”.
The healthcare startup would be entering a particularly volatile market, however. The Nasdaq and S&P 500 hit six-month lows Monday, with President Donald Trump’s trade war and sweeping job cuts across the federal government sparking fears of a recession.
Barring a market collapse, multiple investors and bankers told BI in February that Hinge Health would be the best choice for the year’s first digital health IPO, with margins more akin to a software company than a healthcare services provider.
We read through Hinge Health’s 250-page S-1 filing to get the most important details. Here are our three key takeaways.
Strong growth, nearly profitable
Investors and bankers told Business Insider in February that healthcare startups considering an IPO should have revenue in the several hundreds of millions, profitability, and growth at a pace of 30% or more on top of the prior year’s revenue.
Hinge Health nearly ticks all of those boxes.
The startup reported $390 million in revenue in 2024, up 33% from the previous year’s revenue.
Especially impressive for a healthcare startup is its gross margin — the company retained 77% of its revenue last year after subtracting the costs of providing its services.
The startup isn’t profitable by all metrics yet, but it’s getting there. Hinge Health recorded $45 million of free cash flow in 2024 but a net loss of $11.9 million for the full year.
That’s down from a massive $108 million in net losses for 2023. Per the filing, the startup appears to have cut its losses through a variety of strategies, including laying off 160 employees in April 2024 and cutting its sales and marketing spend in the fourth quarter.
The valuation question
Hinge Health’s initial filing doesn’t include pricing information. Whatever IPO price it looks for will run up against the $6.2 billion valuation the startup landed with its October 2021 $400 million Series E, led by Tiger Global and Coatue Management.
Hinge Health has raised more than $1 billion from VCs, including Tiger, Coatue, Insight Partners, Atomico, and 11.2 Capital.
Per its S-1 filing, the startup had $466 million in cash and securities at the end of 2024.
Hinge Health raised its Series E when healthcare startup valuations were high. That’s hardly the case anymore, as a number of the digital health companies that went public in 2021 have since gone private in lower-value acquisitions, declared bankruptcy, or otherwise shed billions of dollars in value. Telehealth company Amwell, for example, went public in 2020 at a $3.9 billion valuation. As of March 11, its market cap is $121 million.
Time will tell if Hinge Health’s current financials, four years after its last public valuation, can inspire a valuation above $6.2 billion.
The filing also notes that Coatue will sell $50 million in shares back to the company immediately before Hinge’s IPO. That agreement was created in February, per the filing. The company didn’t share a reason for the stock repurchase.
Landing more contracts at a cost
Hinge Health focuses on selling to self-insured employers. It also has partnerships with health plans and pharmacy benefit managers.
Through a combination of virtual care tools and AI, Hinge Health said it’s been able to slash the number of human care hours required through traditional physical therapy by 95%. The company uses AI for its motion-tracking technology and for personalizing patient care plans. It also offers an FDA-cleared wearable device that provides electrostimulation for pain relief.
Per the filing, while Hinge’s growth strategy includes adding to its existing care areas, including women’s pelvic health and fall prevention, it’s primarily focused on attracting new clients and engaging its existing ones.
At the end of 2024, Hinge Health had over 532,000 members out of 20 million covered lives. The startup says it has more than 2,250 clients. It’s further incentivized to draw in and keep members with a portion of its contracts that award Hinge more revenue for higher member engagement. Hinge Health also wants to grab more contracts with Medicare Advantage plans and fully insured employers, per the filing.
The startup said it plans to continue to expand its client base beyond the US in 2025. It started contracting with US-based employers in Canada last year and plans to seek deals in Europe this year.
The filing doesn’t share Hinge’s average cost of acquiring new customers. But the startup has spent large portions of its revenue on sales and marketing — of the eight financial quarters between 2023 and 2024, Hinge Health spent 50% or more of its revenue on sales and marketing for five of those quarters. The startup cut that spending significantly in the fourth quarter of 2024, down to 30% from the third quarter’s 44%.
Hinge Health said it expects its absolute spend on sales and marketing to increase as it seeks new contracts.
If successful, Hinge Health’s IPO could open the door for more healthcare startups to consider going public.
Omada Health appears to be among the startups first in line to go public after confidentially filing its S-1 last summer, BI reported in October. Physical therapy startup Sword Health, Hinge’s closest rival, has also expressed interest in going public when the IPO markets reopen. Sword hit a $3 billion valuation after raising a combination of $30 million in equity and $100 million in secondary sales in June.
