Sword Health, a virtual physical therapy unicorn, has recently raised $30 million in new funding, catapulting its valuation to $3 billion. This development marks a 50% increase from its previous valuation of $2 billion in November 2021.
Sword Health Secures $30 Million Funding, Enables $100 Million Employee Equity Sale at $3 Billion Valuation
The $30 million funding round, which saw participation from existing investors like Khosla Ventures, General Catalyst, BOND, and Founders Fund, was not the only financial maneuver Sword Health executed, TechCrunch reports.
The company also facilitated a $100 million secondary round, allowing employees and early investors to sell shares. This dual approach was initially unexpected.
As Virgílio Bento, Sword Health's CEO and founder, explained, the company intended only to carry out the secondary sale but opted to add the primary round after seeing the secondary round oversubscribed.
Bento noted, "It's a very intense environment: long hours and high expectations. We wanted to reward our team, especially our early employees."
He added that this strategy aimed to both acknowledge the dedication of the team and signal the company's robust health to the market, particularly in the challenging fundraising environment of 2024.
Despite the significant influx of capital, Bento revealed that the company does not require the $30 million for operational purposes. Instead, it will be reserved, generating interest.
Sword Health Launches AI-Powered Virtual Physical Therapy
The company has also introduced Phoenix, an advanced AI solution designed to enhance its virtual physical therapy services. Phoenix offers a more human-like experience for patients, enabling them to interact, receive feedback, and adjust their therapy sessions in real-time.
As CNBC reports, Phoenix allows patients to communicate directly with the AI, providing feedback on their condition and receiving tailored adjustments to their therapy regimen. This interaction is facilitated through a company-provided tablet that tracks patients' movements and progress.
Phoenix's capabilities extend beyond mere interaction. The AI analyzes patient data and generates recommendations, which are then reviewed by human clinicians. This ensures that while AI optimizes efficiency and engagement, the final decisions on therapy adjustments remain under human professional oversight.
What's Next?
Sword Health operates in a competitive market, facing rivals like Hinge Health, which was valued at $6.2 billion as of October 2021. However, Sword Health's innovative approach and continuous advancements, such as its Phoenix technology, give it a strong position in the industry. The company has conducted over 3 million AI-powered therapy sessions, demonstrating its extensive reach and impact.
Looking to the future, Sword Health's CEO, Bento, has expressed ambitions for an initial public offering (IPO), potentially in 2025. This would depend on the company's continued growth and favorable market conditions. For now, Sword Health remains focused on expanding its offerings and services.
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