Hinge Health’s recent debut on the New York Stock Exchange marked a watershed moment for digital healthcare, turning early investors and company executives into overnight millionaires. The virtual musculoskeletal care provider’s shares jumped 32% on their first day of trading, dramatically exceeding initial expectations and signaling strong market confidence in tech-enabled healthcare solutions.
Daniel Perez, who co-founded Hinge Health in 2015 while pursuing his doctorate at Oxford University, saw his roughly 15% stake in the company surge to an estimated value of $840 million. The journey from academic project to multibillion-dollar public company represents one of the most successful transitions from research to commercial healthcare innovation in recent years.
“We started with a simple mission to make quality physical therapy accessible to everyone, not just those who could afford expensive in-person visits,” Perez told Business Insider. “Nine years later, we’re helping millions of people manage pain without surgery or opioids.”
The company’s valuation—now hovering around $5.6 billion—reflects growing investor enthusiasm for digital health platforms that can reduce traditional healthcare costs. Hinge Health claims its digital physical therapy programs help employers and health plans save up to $2,500 per patient by avoiding unnecessary surgeries and reducing dependence on pain medications.
Early venture capital firms scored particularly impressive returns. Bessemer Venture Partners, which led the company’s Series A funding round in 2017 with a $7 million investment, now holds a stake worth approximately $410 million. Coatue Management and Tiger Global Management, later investors in the company, have seen their stakes multiply several times over in just a few short years.
The IPO created wealth far beyond the executive suite. According to regulatory filings, approximately 75 early and mid-level employees became paper millionaires when the company went public. This wealth distribution highlights Silicon Valley’s unique ability to transform technical talent into capital wealth, though much of this new wealth remains locked in post-IPO share restrictions.
Hinge Health’s success stands in stark contrast to the broader digital health landscape, which has struggled with profitability concerns and valuation pressures. Market research firm Rock Health reports that digital health funding declined 27% in 2023, making Hinge’s public market reception all the more remarkable.
Healthcare industry analysts point to several factors driving the company’s strong performance. “Hinge Health has done what many digital health startups fail to do—prove they can reduce healthcare costs while improving outcomes,” explains Marissa Moore, healthcare analyst at Morgan Stanley. “Their clinical data showing a 69% reduction in pain scores gives them credibility with both providers and payers.”
The company’s business model targets self-insured employers and health plans, offering digital therapy programs for back, joint, and muscle pain—conditions that affect roughly half of all American adults at some point in their lives. With more than 1,000 employer clients, including Target, Salesforce, and Costco, Hinge has established a sustainable revenue stream that helped it generate $175 million in 2023 revenue.
Yet challenges remain for the newly public company. Competition in the digital musculoskeletal care space has intensified, with rivals like SWORD Health and Kaia Health securing substantial funding. Additionally, Hinge must navigate changing reimbursement policies from insurers still determining how to properly value virtual care.
The current economic environment presents another hurdle. Rising interest rates have made investors more skeptical of growth-focused companies that aren’t yet profitable. While Hinge’s prospectus revealed narrowing losses—from $92 million in 2022 to $67 million in 2023—the company hasn’t yet reached profitability.
“The next two years will be critical for Hinge Health,” says Jason Krantz, founder of healthcare analytics firm Definitive Healthcare. “They need to demonstrate they can achieve profitability while maintaining their growth trajectory. The market has shown patience with digital health, but that patience isn’t unlimited.”
For patients, Hinge Health’s continued expansion could mean greater access to non-surgical pain management options. The company’s platform combines wearable sensors, exercise therapy, and one-on-one coaching with physical therapists. Research published in JAMA Network Open showed participants experienced significant pain reduction compared to traditional care approaches.
The success of Hinge Health’s IPO may also foreshadow renewed investor interest in digital health companies that demonstrate strong clinical outcomes. After the pandemic-driven digital health boom and subsequent market correction, investors appear to be recalibrating their expectations around companies with proven clinical efficacy and clear paths to profitability.
“What we’re seeing is a flight to quality in digital health investing,” notes Annie Lamont, managing partner at Oak HC/FT, a healthcare-focused venture capital firm. “Companies that can prove they’re improving healthcare while building sustainable businesses will continue to attract capital, whether public or private.”
For employees who received equity as part of their compensation packages, the successful IPO represents life-changing financial opportunities. Many early team members who joined when the company was valued below $100 million now hold stakes worth millions—though they’ll need to navigate lockup periods before cashing in fully.
As Hinge Health enters its next chapter as a public company, both the healthcare industry and financial markets will be watching closely. Its performance could help determine whether digital health truly represents the future of care delivery or simply another overhyped technology sector struggling to deliver on its promises.
