If you have chronic back or joint pain, you know the struggle of schlepping to a physical therapist every week or two to help get better.
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It’s not always easy to make time for our health, sadly. I, for one, have been guilty of passing on physical therapy appointments for that very reason.
One San Francisco-based startup is out to help chronic pain sufferers by bringing a therapist to them, digitally. And it’s just raised a nice amount of cash to help it reach that goal.
The round is more than double the $36.3 million previously raised by Hinge Health since its inception in 2014. It’s also more than triple the $26 million raised in the company’s series B in August of 2018. Insight Partners led that round.
There are a few things that stand out about what Hinge Health is doing. For one, it’s covered by most insurance plans so people participating in its program don’t have to pay out of pocket. In fact, it’s primarily selling into the self-insured employer market. Secondly, the company operates on a SaaS platform but it also has a hardware and service component.
Allow me to explain.
How it works
Users are given two wearable sensors (placed on varying areas depending on the location of their pain), and do their physical therapy for 20 minutes three to four days a week–the hardware component.
They are also provided with a tablet computer and personalized coach–the service component–to take them through their key stretching activities. And between physical therapy sessions, Hinge Health delivers patient education.
“The ups and downs of everyday life can get in the way,” said Hinge Health co-founder and CEO Daniel Perez. “But we are finding that our program increases adherence.”
Users seem to approve, considering the company boasts “a 100 percent retention rate.” The company also claims to hold “an over 80 percent market share.” Competitors include Reflexion Health and Sword Health, among others.
I was curious as to how the company had gained so much market share. Perez explained it this way: “We’re the only digital MSK program with the highest security standards–allowing us to breeze through security assessments, even for the most exacting customers (such as nuclear power plants and government agencies). And, after five years, we’ve never lost a customer.”
Hinge Health must be doing something right. Perez said it’s tripled its customer base in the last six months. It’s done over 200 enterprise implementations, and is working with Walgreens, Red Bull, Vail Resorts, Kraft Heinz and US Foods, among others. Overall, it has had 40,000 participants to date and, Perez said, is aiming to cross 100,000 this year. At US Foods alone, 40,000-plus members all have access to Hinge Health. And the company tripled its Annual Recurring Revenue in 2019, according to Perez.
Looking ahead, the company plans to use its new capital “to expand across the MSK care continuum, accelerate employer and health plan market growth, and advance surgery prediction and member support.” Naturally, as part of that, Hinge Health plans to keep hiring. Specifically, it plans to double its headcount over the next 12-18 months from over 225 today to over 400. About a year ago, the startup had about 85-90 employees, according to Perez.
“We are looking to triple the size of our R&D team as we continue to expand our product roadmap,” he told me. We’re also investing heavily into growing our clinical team. We’ve seen such good enterprise customer growth that we’re keen on maintaining that.”
Perez declined to comment on valuation and said the company is not yet profitable and does not expect to be this year with all its hiring plans. But the goal is to be cash- flow positive in 2021 (despite a potential reaching of that goal during this quarter).
Bessemer Venture Partners’ Steve Kraus is joining Hinge Health’s board as part of the funding. In a written statement, he expressed his bullishness on the company.
“US employers and health plans are looking not just for outcomes, but also meaningful engagement and–critically–enterprise experience and maturity. That’s why we’ve invested in Hinge Health. Rarely have I seen customers more enthusiastic about a product.”
Illustration: Li-Anne Dias