Digital physiotherapy company Hinge Health closed its first day of trading on the New York Stock Exchange at $37.56 on Thursday, about 17% higher than the $32 IPO price it set the day before.
That’s a good first day result. But even with pop, the public ratings for hinges are significantly lower than their last private market. The approximate market capitalization of the 11-year-old company excluding employee options is around $3 billion, less than half of the $6.2 billion hinge achieved in the October 2021 Series E funding round, led by Tiger Global Management.
Until recently, businesses have spent a very long time avoiding downround IPOs. However, if the rating was 2020-2021, the stigma associated with being published under the last private assessment has been significantly reduced.
Companies whose IPOs are priced lower than the previous private valuation by VCS include Reddit, which debuted last year at around $5.4 billion, and have a valuation of about $10 billion since 2021.
Another example is ServiceTitan, whose IPO valued it at around $6.3 billion, below the $7.6 billion valuation secured in Series H two years ago.
Hinge Health’s IPO raised $437 million, with approximately $237 million in revenue going directly to the company and the rest to existing investors. The company’s largest external shareholders are Insight Partners, which holds 19% of its shares, and Atomico, which holds 15% of all its shares. Other venture capital companies that own approximately 8% of Hinge’s shares include 11.2 Capital, Coatue, Tiger Global, and Bessemer Venture Partners. Co-founders Daniel Perez and Gabriel Mecklenburg own 18.9% and 8.2%, respectively.
The company aims to reduce musculoskeletal pain with the help of wearable sensors and computer vision technology that are monitored remotely by a clinical care team of physical therapists, physicians and board-certified medical coaches.
Another digital health company, Omada Health, filed for it to be made public earlier this month. The 13-year-old startup offers virtual care during doctor visits for chronic diseases such as diabetes and hypertension, competing with hinge health in the musculoskeletal pain reduction space. Omada’s biggest shareholders include US venture partner Andreesen Horowitz, which was valued as a merely above $1 billion in 2022.
Hinge Health’s main competitor is Sword Health, which was valued at $3 billion about a year ago. At the time, Sword Health CEO Virgilio Bento told TechCrunch that if the company grows as expected and the macroeconomic environment is favorable, the company could also pursue an IPO in 2025.
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