The virtual musculoskeletal market is heating up as Sword Health secures a $25 million financing round.
Sword 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.
The company has now raised a cumulative $50 million. Investors in the latest round include Todd Cozzens, managing partner at Transformation Capital and former healthcare investor at Sequoia Capital. Existing Sword investors Khosla Ventures, Founders Fund, Green Innovations, Vesalius Biocapital and Faber Capital also contributed to the new round. Cozzens said he and Transformation Capital invested in Sword after market research with employers, payers and industry partners confirmed the level of quality met the firm’s standards.
“We invested in Sword because the company is solving one of the world’s leading health issues today, musculoskeletal pain, with the most clinically comprehensive MSK digital health solution,” Cozzens said in a statement.
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.
The World Health Organization says MSK is a leading contributor to disability, particularly low back pain. Common conditions include osteoarthritis, back and neck pain, and fractures due to bone fragility.
Organizations that offer Sword’s solution for their employees include benefits provider Concordia Plan Services, retailer Foot Locker and children’s apparel designer Carter’s.
Sword’s digital therapist solution incorporates biomechanical and sensor fusion algorithms that can analyze users' movements and deliver high-precision feedback, explained Virgilio Bento, Ph.D., founder and CEO of Sword. He said the algorithms distinguish Sword’s solution because of their level of complexity and enable “precise execution,” he told Fierce Healthcare.
“The technological complexity of this solution is the reason why we are now seeing the growth of virtual MSK solutions, similar to what the behavioral health and diabetes space saw three years ago,” Bento said.
In fact, digital behavioral health startups have received significant investments in the last year as well, scoring $588 million in funding amid the COVID-19 pandemic, according to a recent midyear report by venture capital firm Rock Health.
In a similar deal in the MSK space, DarioHealth, a digital chronic condition management company, said it would expand into the market this month by acquiring Upright Technologies for $31 million. Another company that offers in-home musculoskeletal therapy, Hinge Health, recently raised $300 million in series D funding. Meanwhile, in May 2020, Omada Health also invested in virtual MSK care by adding virtual physical therapy company Physera to its platform in a deal valued at a reported $30 million.
With the funding, Sword will expand the company’s MSK therapeutic portfolio as well as its delivery of care. It plans to increase the number of conditions it treats and reduce the costs for payers that use Sword’s MSK solution.
In addition, Bento would like to see the ecosystem of players in the MSK space become less fragmented. Sword partners with other telehealth and care navigation solutions, he said.
“Sword is working on enhancing these partnerships since one of the biggest flaws of the current benefits space is the fragmented nature of the ecosystem,” Bento said. “We fully understand that to maximize our value proposition, we need to maximize the interconnectivity of Sword with every other player and partner where a patient might be.”
The COVID-19 pandemic has motivated people with MSK conditions to adopt virtual care when they otherwise might not, according to Bento. It’s unlikely the momentum toward virtual care will be reversed once the pandemic has subsided, he said.
“Now, after seeing the results, it is clear that a solution like this can not only match the gold standard of in-person care but exceed far beyond it, as we have done at Sword,” Bento said. “There’s no going back to the status quo, the old way of doing things. Virtual care is here to stay.”