Digital therapy firm Hinge Health aims to raise $437m in IPO

Hinge Health, a digital physical therapy startup, plans to raise up to US$437 million in its IPO with shares priced between US$28.00 and US$32.00.

The stock will be listed under the ticker “HNGE” on the New York Stock Exchange.

The company aims to sell 13.7 million shares, potentially valuing it at US$2.42 billion.

However, this estimate could fluctuate due to share dilution.

The company reported US$123.8 million in revenue for Q1 2025, a 50% increase from the same period last year, showing strong growth in the digital health sector.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Digital health’s valuation recalibration signals market maturation

Hinge Health’s IPO valuation target of $2.6 billion represents a significant reset from its $6.2 billion private valuation in 2021, reflecting a broader correction in digital health valuations1.

This adjustment mirrors the experience of previously public digital health companies, where two-thirds saw their stocks decline in 2024 despite a strong performance in the broader Nasdaq2.

Companies like Teladoc experienced even more dramatic corrections, with its market cap falling from $37 billion (including Livongo) to under $1.6 billion, highlighting investors’ reassessment of the sector’s growth potential2.

The valuation recalibration demonstrates a market maturing beyond the pandemic-fueled enthusiasm that drove record funding of $29.1 billion for digital health startups in 20212.

This trend represents a shift toward more sustainable business metrics rather than a fundamental rejection of digital health models, as companies still demonstrating strong unit economics are finding receptive markets.

2️⃣ Profitability emerges as the new north star for healthcare IPOs

Hinge Health’s timing is strategic. The company recently achieved its first quarterly net profit of $17.1 million, marking a significant turnaround from a $26.5 million loss in the same period last year1.

This profitability milestone aligns with current investor expectations, where healthcare companies considering IPOs must now demonstrate not just strong revenue growth but also clear paths to profitability3.