Digital therapeutics company Kaia Health has raised $75 million in series C funding on surging demand for digital musculoskeletal services.
Kaia Health uses machine learning (ML) to offer individualized care through apps, which let patients self-manage conditions such as back pain, chronic obstructive pulmonary disease (COPD) and osteoarthritis.
An unnamed investor led the funding round and existing investors such as Optum Ventures, Eurazeo, capital300 and Symphony Ventures, the investment company of golfer Rory McIlroy, also participated.
The COVID-19 pandemic has led to increased demand for digital MSK services, according to Kaia Health. The company reported that it has grown its business during the health crisis by 600%. During the pandemic, digital health became the “standard of care,” said Konstantin Mehl, CEO and founder of Kaia Health.
“Pre-COVID around 20% of health plans were interested in offering digital therapy pathways to their members,” Mehl told Fierce Healthcare. “Now it’s 100%, due to the necessity to offer digital treatments, while offline medical treatments for chronic diseases are considered elective treatments and have been much harder to access during the pandemic. To meet this increased demand, we have to expand our commercial team much faster.”
Mehl said that the company wasn’t necessarily looking for investments for this round.
“We didn’t really actively raise but met an investor who wanted to invest really quickly, so we decided to raise the C round much earlier than expected,” Mehl said.
Kaia Health will invest in building out its U.S. commercial team and improving its product experience.
“For example, we will further integrate with medical providers and enhance our coaching capabilities,” Mehl said.
In addition, the company plans to invest further in computer vision. Kaia Health offers an app called Motion Coach, which uses computer vision from a smartphone camera along with proprietary AI algorithms to analyze a person’s movements in real-time. The motion-tracking technology acts as a digital biomarker to calculate flexibility, range of motion and stability. In addition, Kaia Health uses gamification as part of warmup exercise routines.
The company’s therapy algorithms can choose exercises that match a user’s condition and physical abilities, according to Mehl.
Mehl describes how Kaia Health’s exercise feedback works: “Users put the phone on the floor and do their exercises in front of the phone,” he said. “Our machine learning technology then recognizes and tracks the movements through the smartphone camera. Users then receive immediate, audio-visual feedback on how to improve their form.”
In addition, Kaia Health recently introduced an MSK care model called Kaia Gateway and Premium Partners. Gateway offers a case review service and algorithms for triaging and Premium Partners offers interoperability and treatment history to other providers.
MSK conditions are a leading cause of disability, according to the World Health Organization and companies in the digital MSK space are attracting big investment dollars.
Hinge Health recently banked a $300 million "heavily oversubscribed" series D round that pushed its valuation to $3 billion. Virtual care provider Sword Health also recently announced a funding round, securing $25 million.
Omada Health acquired virtual physical therapy company Physera for a reported $30 million and telehealth company DarioHealth bought Upright Technologies for $31M to expand into the digital MSK market.
Kaia Health has raised $125 million total to date. The first quarter of 2021 brought a robust $3.1 billion in digital health investments. In the coming months, Kaia Health expects to double its workforce over the next year and expand its user base substantially, Mehl said.