Sword Health banked $110 million in six months to fuel its global expansion and to build value-based care models for musculoskeletal care.
The virtual MSK provider drew up $85 million in a series C funding round led by General Catalyst with participation from BOND, Highmark Ventures and BPEA along with returning investors Khosla Ventures, Founders Fund, Transformation Capital and Green Innovations. The fresh capital follows quickly on the heels of a $25 million series B round in January, raising the total to $135 million to date.
The company wasn't expecting to raise fresh capital until the end of 2021 or early 2022, but the accelerated adoption of digital MSK solutions in the past year and Sword Health's rapid growth fueled the series C funding round, Virgílio Bento, CEO and founder of Sword Health, told Fierce Healthcare.
Sword Health is a virtual care provider that lets people with MSK conditions recover at home rather than seeking in-person care for imaging and surgery or choosing to take opioids, according to the company. The company treats MSK issues affecting areas such as the lower back, shoulder, neck and knee.
Sword offers an MSK product called digital therapist, which connects in-house doctors of physical therapy to Sword members who wear motion sensors and access a personalized artificial-intelligence-powered therapeutic exercise program on a tablet. The motion sensors let physicians track members’ progress in real time.
Launched in 2015, the company works with insurers, health systems and employers in the U.S., Europe and Australia.
The company reports year-over-year revenue grew 600%, and its user base has jumped by more than 1000% year over year.
MSK disorders are one of the leading causes of chronic pain and disability, affecting over 2 billion people worldwide. The current healthcare system has answered this crisis with expensive and often unnecessary surgical procedures, failing to relieve MSK pain and often putting patients at risk of dependency on both prescription and over-the-counter pain medications, according to Sword Health executives.
The company plans to use the fresh capital to build its value-based MSK platform to help reduce costs to payers, employers and providers.
“We were the first company to introduce sensor-based technology to treat patients alongside a doctor of physical therapy, and the first to deploy a global solution that treats patients across three continents. Now, it’s time to pioneer this space again by developing the leading results-oriented, value-based virtual musculoskeletal care provider model in the world and decrease the cost of high-quality MSK treatment for all," Bento said.
Sword Health's digital solution covers acute, chronic and preventive care.
Employers working with Sword Health say the solution is helping address a critical and expensive healthcare challenge.
At medical company Danaher, associates with MSK conditions account for 51% of the company's medical spend when factoring other comorbidities, according to Amy Broghammer, health and welfare benefits manager at Danaher.
Working with Sword Health, the company reports that after 12 weeks, associates with MSK conditions had an 80% decrease in surgery intent, a 49% pain reduction and a 72% increase in productivity.
The treatment of MSK disorders costs the U.S. health system alone in excess of $300 billion per year.
Chris Bischoff, managing director, General Catalyst, said Sword Health is setting the new standard of therapy in MSK by combining novel hardware, software and physician-directed care.
"We’re impressed by the performance of Sword Health and are excited to partner with Virgilio and the team to further improve patient outcomes and reduce unnecessary costs in MSK for payers, employers and providers—helping solve one of the most important and urgent problems in healthcare," Bischoff said.
Investors are pouring big cash into the virtual MSK market. Hinge Health recently banked a $300 million "heavily oversubscribed" series D round that pushed its valuation to $3 billion.
Digital therapeutics company Kaia Health raised $75 million in series C funding on surging demand for digital MSK services.
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.