▼ Summary
– Sword Health raised $40 million at a $4 billion valuation, led by General Catalyst, marking a 33% increase from its previous $3 billion valuation.
– CEO Virgílio Bento raised funds to update the company’s valuation and prepare for strategic acquisitions, despite Sword being cash-flow positive.
– Sword Health, originally a virtual physical therapist, expanded into pelvic and mental health services and delayed its IPO plans, now targeting 2028.
– Bento reconsidered IPO plans after learning about public company management, citing no compelling reasons to go public and preferring private funding.
– Sword expects to raise $50 million at a $5 billion valuation next year, following its pattern of increasing funding rounds and valuations.
Sword Health secures $40 million in fresh funding at a $4 billion valuation, marking a significant 33% increase from its previous $3 billion valuation just twelve months ago. The investment round was spearheaded by existing backer General Catalyst, reinforcing confidence in the digital health company’s trajectory.
While the AI-driven healthcare platform already operates profitably, founder and CEO Virgílio Bento emphasized the strategic rationale behind the capital infusion. Beyond updating the company’s valuation, the funds will fuel potential acquisitions and support expansion into new therapeutic areas. Originally launched as a virtual physical therapy solution, Sword has since broadened its offerings to include pelvic health and mental health services, with ambitions to tackle additional medical specialties.
Previously, Bento had floated the idea of a 2025 IPO, but those plans have now been pushed to 2028. Despite the recent public market debuts of competitors like Hinge Health and Omada, and Sword’s impressive $240 million annual revenue run rate, Bento remains cautious. He believes the company should first demonstrate scalable success across multiple care verticals, including cardiovascular, gastroenterological, and speech therapy, before pursuing a listing.
Bento’s hesitation stems from extensive discussions with public company executives and financial advisors. “After evaluating the pros and cons, I couldn’t justify going public right now,” he admitted. He challenges conventional IPO motivations, arguing that brand recognition and capital access can be achieved without public markets, citing giants like Ikea and Lego as proof. Additionally, he noted that secondary markets provide ample liquidity for employees and early investors, with Sword planning a tender offer soon.
Looking ahead, Bento hinted at another funding round in 2025, playfully projecting a $50 million raise at a $5 billion valuation to maintain what he calls “numerical symmetry.” The latest investment brings Sword’s total funding to $380 million, with participation from Khosla Ventures, Comcast Ventures, and other notable firms.
By delaying its IPO, Sword Health aims to solidify its position as a comprehensive digital healthcare provider before entering the public arena, a move that could redefine patient care across multiple medical disciplines.
(Source: TechCrunch)
