Dive Brief:
Hinge Health hit the public markets on Thursday, raising $437.3 million alongside its selling shareholders in an IPO that could serve as a key indicator for other digital health firms looking to go public.
The digital musculoskeletal care company opened on the New York Stock Exchange at $39.25 per share Thursday, rising 23% above its public offering price of $32 per share.
Few digital health companies have gone public in recent years, but a successful IPO could be significant for the industry, experts say. “As long as [the share price] stays flat, I think it’s a win for the sector,” Aaron DeGagne, senior analyst for healthcare at PitchBook, told Healthcare Dive. “I think at this point any listing is a win.”
Dive Insight:
Founded in 2014, Hinge offers digital musculoskeletal care and physical therapy, including through an artificial intelligence-backed movement sensor and a wearable device that provides electrical nerve stimulation.
The company, which has previously raised hundreds of millions in venture capital funding, filed to go public in March. Hinge’s IPO price was at the top of the expected range it released earlier this month.
One boost for Hinge was the company’s recent move toward profitability, DeGagne said. The company reported a net income of $17.1 million in the three months ended March 31, compared with a loss of $26.5 million the prior-year period, according to a securities filing.
“I think public market investors got burned with pretty much all digital health companies that went public in the boom times of 2020, 2021,” DeGagne said. “So profitability was a huge item to have here.”
A number of firms publicly exited in 2021 amid record-breaking levels of venture capital investment in digital health. But IPOs soon slowed to a crawl, and many companies failed to perform on the public markets.
However, more digital health companies could be poised to move toward an IPO, especially if other offerings are successful, experts say.
Another digital health firm, chronic condition management company Omada Health, filed to go public earlier this month.
Other companies that could be inching toward an IPO include Hinge competitor Sword Health, mental health firm Spring Health and women’s and family health company Maven, according to DeGagne.
Broader market conditions will also make an impact too. For example, companies like Klarna and StubHub delayed their IPOs last month after President Donald Trump’s tariff plan caused turmoil on the markets.
“If shares start to climb significantly, I think that tilts things more towards potentially more listings,” DeGagne said. “But I think that it’s more related probably to overall market conditions than share price performance of one company.”
