Digital MSK provider Sword Health gets $189M, boosts valuation to $1.8B

Sword Health, a virtual provider of musculoskeletal care, has reached health tech unicorn status with an additional $189 million in funding.

The initial series D round of $163 million was led by Sapphire Ventures with participation from new investors including Sozo Ventures and Willoughby Capital as well as previous investors including General Catalyst and Khosla Ventures.

But the series D was “heavily oversubscribed,” the company said, resulting in an additional $26 million invested in a secondary transaction that catapulted Sword’s valuation to $1.8 billion.

Launched in 2015, the company has raised approximately $324 million to date, with nearly $300 million raised this year alone.

Sword’s virtual MSK solutions include its hallmark product called Digital Therapist, which lets members connect with physical therapists and track their progress with wearable motion sensors and a personalized artificial-intelligence-powered exercise program.

“I started Sword after a traumatic personal experience where I saw first-hand the challenges that families face when they have to recover a loved one,” said Virgilio Bento, founder and CEO of Sword Health, in a statement. “It’s been truly humbling to see the impact Sword is having on thousands of members across the globe. With this new funding, we will accelerate our value creation for members, self-insured employers and health plans, as we continue to build the flagship digital MSK solution in the healthcare world, everywhere and for everyone.”

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Approximately 1.7 billion people suffer from MSK conditions, according to the World Health Organization, making them the leading contributor to disability across the globe.

The company, which works with insurers, health systems and employers in the U.S., Europe and Australia, has experienced “exponential growth” in the last year and a half, according to Monday’s statement.

Sword recently expanded its offerings with an end-to-end clinical platform, offering around-the-clock connection opportunities with physical therapists, a combined wearable and video monitor to correct unsafe movements and educational content.

In October, the company acquired Vigilant Technologies, which offers wearables that help correct posture and prevent injuries in the workplace.

"Sword created the most effective way in the market to treat MSK conditions, and we are excited to help achieve Sword’s mission of freeing two billion people from physical pain," said Andy Chan, founder and CEO of VIT, in the companies' announcement of the acquisition.

Competition in the virtual MSK market has been heating up in the past few years, with investors pouring big bucks into related companies.

Hinge Health, a digital health company with a virtual MSK clinic, announced a $600 million series E round in October, sending its valuation to $6.2 billion.

Chronic condition management company DarioHealth also expanded into the virtual MSK market in October with its launch of a new physical therapy program for non-acute MSK pain.