Summary List Placement
The global digital health sector has unsurprisingly boomed amid the ravages of the coronavirus pandemic, with companies and consumers increasingly seeking out alternatives to in-person services.
Investors too are pouring more money into the space. One recent beneficiary is Hinge Health, which raised $300 million earlier in January to become the most highly valued private healthtech in the US, the company said.
The Series D round was jointly led by private equity giants Coatue Management and Tiger Global and raised the valuation of startup to $3 billion, according to Hinge Health’s announcement.
The San Franc iso-based startup offers a digital clinic for musculoskeletal (MSK) pain and is available to more than 300 enterprise customers in the US. The company’s customer base tripled and revenue quadrupled in 2020, according to Hinge Health’s CEO Daniel Perez.
“It was a very interesting year for us — in March every investor was concerned due to the pandemic, but we decided to stay the course,” Perez told Insider in an interview. “We knew there would be a counter revolution after a five or so week period where people weren’t answering the phone. We said, ‘If we can overcome this and execute we will win’ — and we were one of fastest growing companies in tech last year.”
The startup, founded in 2015, avoided layoffs or salary cuts and continued to hire last year. This new fundraising will help Hinge Health continue on its growth trajectory, with its current 550 headcount likely to double by the end of 2021, Perez said. The company was named as a healthtech company changing the industry recently.
Amid a crazy year for IPO listings in the US, and a likely continued surge into 2021, Hinge Health is primed for a debut on the public markets.
“There was enormous investor interest when we opened the round — within 24 hours we had more than $400 million in commitments,” Perez added. “They [Coatue and Tiger Global] are the two best funds for a pre-IPO round, it’s very rare that they co-lead the same round.”
The two private equity firms’ involvement continues a trend of major hedge funds and private equity piling into late stage startups.
Existing investors Atomico, Insight Partners, Quadrille, 11.2 Capital, Lead Edge Capital, Bessemer Venture Partners, and Heuristic Capital also participated in the funding round. Hinge Health has raised just over $426 million in total, according to Crunchbase.
Read more: Investors are pouring cash into mental health startups during a rough 2020. Here are 19 to watch, picked by top European VCs.
Despite the obvious incentives provided by public markets to buzzy startups, Perez claims that the company’s growth path is “laser focused” on growing its digital clinic for MSK.
“There is no pressure to IPO soon,” said Perez. “We’re hoping to be in a position to go public, or whatever, in 2022.”
To put Hinge Health’s rise into context, the company’s previous funding round (a $90 million fundraise in February 2020) valued the business at $428 million, one-sixth of the most recent valuation.
Perez said there’s still ample opportunity to grow further. “Healthcare is one-sixth of the US economy and around one-fifth of that is related to MSK,” he said. “That’s around 3% of [gross domestic product] so it’s a huge area of spend to disrupt.”
Check out Hinge Health’s pitch deck below: