What to Expect From Upcoming Digital Health Ipos

Digital health companies may be preparing to test the IPO market (per a report from Axios). Are they ready? Outsized valuations during the prior funding frenzy may have painted unicorns into a corner. Too large to be acquired (and unlikely to find favorable terms), companies are faced with going public as the only means to an exit. Going public means showing your hand, revealing both financials and business models (for better or worse). The companies most likely to go public last raised at valuations that far exceed the current market cap of many previous digital health IPOs. Retail investors may be willing to buy the promise of eventual sustained profitability for companies like Uber, Twitter/X, and Peloton -- will they do the same for digital health companies they've never heard of? What are the long-term ramifications for digital health if unicorn IPOs fall flat? I'm most curious to see how companies with patient-facing solutions fare (especially in MSK). What happens to your mission when the early days of growth, free flowing venture capital, and endless possibilities give way to the pressures of an IPO? The paradox of healthcare is that, even though it's a $4.3 trillion industry, making money isn't as easy as it seems (at least for non-incumbents). Great ideas and great products that solve real problems still must find a way to reach profitability. If the mission buckles, so too will the promise of "fixing a broken system?" We'll hear a lot about revenue, EBITDA, member growth, path to profitability, etc. Will we hear as much about clinical outcomes? Early-stage companies have the benefit of learning from the mistakes of the past -- too much focus on hype, growth, and first-mover advantage, not enough focus on evidence, impact, and business model. A re-setting of the landscape may be best if digital health is to fulfill its promise. But IPO failures could be a further drag on a sector that is in danger of losing "it" status to AI. Pretenders who go public will die a slow death (as we've already seen). Still, IMO, it would be a mistake for late-stage companies to go public under pressure. Panicking won't fix a flawed approach. Engage traditional healthcare. Find experts who have real world experience. Don't buy in to your own hype. Stay humble. If you believe in your mission, are earnest about driving change, and can execute on your vision, there is still a path ahead. #digitalhealth #healthtech #healthcaretechnology #medicine #healthcare #ipo

Is Hinge Health About to Break the Digital Health IPO Curse? Hinge Health is preparing to IPO and it may revive the digital health listing scene. Timing remains uncertain amid market volatility, but there are several reasons for optimism: ✅ Hinge are built on a B2B2C model, selling to employers and payers rather than directly to consumers. Their value is clear to buyers focused on reducing absenteeism and managing MSK costs ✅ They offer a hybrid solution combining digital tools (apps, sensors, virtual coaching) with human-led care, helping scale while still delivering clinical outcomes ✅ They expanded into device-based care with the FDA-cleared Enso wearable and introduced TrueMotion, a sensor-free motion tracking technology ✅ Also broadened into new clinical areas such as pelvic health and menopause-related MSK care ✅ Hinge have strong engagement and outcome data, including reduced pain and surgery intent, which resonates with cost-conscious employers ✅ They benefited from macro trends like rising MSK costs, growing employer demand, and greater acceptance of remote care post-COVID ✅ Focused on institutional clients, with over 2,250 employers and health plans and 20 million lives covered. Now contracted with the five largest US health insurers. Recent partnerships include Cigna, Amazon Health, Teladoc, Midi Health, and Sun Life ✅ Financial performance is improving: $390M revenue in 2024 (up 33 percent), $124M in Q1 2025 (up 50 percent), and $17.1M in Q1 profit after prior losses. But there are still some challenges ahead ⚠️ Last valuation was $6.2B, but the IPO may price lower given broader skepticism about 2021–2022 valuations, and timing remains uncertain ⚠️ In 2024 Hinge still closed with an $11.9M loss, though a major improvement from a $108M loss in 2023 ⚠️ Revenue concentration among a few large clients may pose a risk. ⚠️ Hinge faces rising competition from Sword Health, Vori, RecoveryOne and others in the MSK space Whatever happens it will be interesting #DigitalHealth #IPO

What could the impending Hinge Health IPO mean for digital health & venture funding? Digital health has had a paucity IPOs since the pandemic, and many of the companies that are public have seen drastic stock declines, been acquired, or even shut down. All of this has hurt VC funding in the space -- the comps simply don't look great. Unlike many of the digital health IPOs from the pandemic era, Hinge is actually generating cash, so it might buck the trend and create a more positive comp for VCs to use for private stage companies. It has SaaS-like margins, likely due to (1) its use of async (not sync) "care," (2) lower cost non-clinicians delivering the service (coaches), and (3) relative pricing power -- MSK has very high cost ticket items (surgeries), so you can price for value and generate an ROI at a high ARPU. This gives them plenty of room on a % of revenue basis to forge channel partnerships with revenue shares (likely 5-20%) -- Hinge has many of these relationships, often called "buy ups." These are key to drive revenue through employers with "point solution fatigue." Even with positive cash flow and strong gross margins, Hinge has a valuation to grow into. Their reported last round valuation was $6.2 billion in January 2021. Given they reportedly generated $390M of revenue in 2024 - that's a hefty revenue multiple to get back to a $6.2 billion valuation. In all, I'm excited for the Hinge IPO and hopeful it will open the gate for the next generation of digital health IPOs. The market needs liquidity to keep functioning. #digitalhealth #healthtech #virtualcare

The next group of digital health companies to go public will face a critical test: Do they have true tech products that can produce consistent profits? Many companies in the last cohort of digital health IPOs were merely offering traditional health care services zhuzhed with some tech. (See: Teladoc, Amwell). "If you're a true tech company in health care, you have more upside, you can scale faster, and you can bring costs down," one digital health executive told me recently. The new group is expected to include digital physical therapy firm Hinge Health, virtual diabetes care provider Omada Health, and women's digital health unicorn Maven Clinic. (Hinge, for example, uses computer vision to track and provide live feedback to people during physical therapy.) "There's a big difference between ... taking traditional health care and just adding in a convenient face-time option — that's not an additive form of treatment or care — and going beyond that," Omada president Wei-Li Shao told me recently. "Our bet is if you can create an engaging and delightful experience between those [traditional doctor's visits], that you can bend the curve," he added. The biggest near-term question is whether AI can help these businesses materially change the stakes for employers and health plans so they become nonnegotiables rather than nice-to-haves.

NEW: Several healthcare startups want to go public when the IPO markets reopen. But they’ll have to contend with high standards from investors and bankers to make it to the starting line. The public healthcare markets are in dire need of a redemption arc. Most of the healthcare companies that went public in the last cycle of IPOs have since plummeted, with some going private again through low-value acquisitions or even declaring bankruptcy. Since 2021, only 4 healthcare companies have gone public. But with startups like Hinge Health and Omada Health filing their S-1s, a new wave of digital health IPOs could be around the corner. The industry is desperate for better public healthcare companies this time around. Investors and bankers told Business Insider that healthcare startups 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. It’s a striking heel-turn from the last cycle, when high-growth but unprofitable healthtech companies with lower revenue were able to go public. My latest: https://lnkd.in/eTwUW8ph