Tech Startup Hinge Health Takes Big Step with IPO Filing

A digital physical therapy company based in San Francisco, Hinge Health, has filed to go public. This move hints at a potential revival in the IPO market, especially in the tech sector, which has been relatively quiet for the past few years. The company specializes in using software to help patients manage musculoskeletal injuries, chronic pain, and post-surgery rehabilitation from the comfort of their own homes. In 2022, Hinge Health's revenue grew by 33%, reaching $390 million. Despite this growth, the company still reported a net loss of $11. 9 million, which is a significant improvement from the $108. 1 million loss in the previous year. The digital health sector has faced challenges since the COVID-19 pandemic, with muted growth and a lack of IPO activity. In 2023, no digital health companies went public. The only notable offerings in 2022 were from Waystar, a health-care payment software vendor, and Tempus AI, a precision medicine company. Hinge Health's journey began in 2014 when the founders, Daniel Perez and Gabriel Mecklenburg, started the company after facing personal struggles with physical rehabilitation. The company offers virtual exercise therapy and an electrical nerve stimulation device called Enso. Hinge Health claims that its technology can help users manage pain, reduce the need for surgery, and lower healthcare costs. The company has raised over $1 billion from investors, including Tiger Global and Coatue Management. As of October 2021, Hinge Health was valued at $6. 2 billion. The biggest outside shareholders are venture firms Insight Partners and Atomico, which own 19% and 15% of the stock, respectively. Hinge Health's stock structure includes a dual-class system, where each share of Class B common stock has 15 votes. Almost all of the Class B shares are held by the founders and top investors. The company's services are used by employees across more than 2, 250 organizations, including big names like Morgan Stanley, Target, and General Motors. As of December 31, Hinge Health had over 532, 000 members, with more than 20 million people eligible to enroll. The company plans to trade on the New York Stock Exchange under the ticker symbol "HNGE. " This move could signal a new wave of digital health companies looking to go public.