Hinge Health, a digital physical therapy startup, ended its first day on the New York Stock Exchange with a 17% gain. Shares rose to $37.56 from $32.
But despite the surge, the company is still well below its previous private valuation. Hinge Health’s post-IPO market cap is around $3 billion, less than half its $6.2 billion Series E valuation in 2021.
“Down-round IPOs” are on the rise
Previously, such situations — when a company goes public at a price lower than what private investors had estimated — were seen as negative. But after the “hot” investment period of 2020-2021, that stigma has diminished significantly.
Examples:
- Reddit: IPO in 2023, valued at $5.4 billion, down from $10 billion in 2021.
- ServiceTitan: IPO at $6.3 billion, down from its previous Series H valuation of $7.6 billion.
Who is Hinge Health backed by?
- The IPO raised $437 million, of which $237 million went to the company, with the rest going to existing investors.
Major investors:
- Insight Partners — 19%
- Atomico — 15%
- 11.2 Capital, Coatue, Tiger Global, Bessemer — around 8%
- 18.9% of all shares are owned by CEO Daniel Perez, and 8.2% by co-founder Gabriel Mecklenburg.
Technology and competitors
Hinge Health provides remote physiotherapy services. They aim to reduce musculoskeletal pain through wearable sensors, computer vision technology, and a team of doctors.
Competitors:
- Sword Health — valued at $3 billion in 2023, has IPO plans
- Omada Health — recently filed for IPO, provides digital care for chronic conditions
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