Digital physical therapy company Hinge Health made its debut on the New York Stock Exchange this Thursday, closing its first trading day at $37.56—up 17% from its IPO price of $32. While the performance suggests strong investor demand, it also highlights a broader trend in tech IPOs: public market resets.
Despite the healthy first-day pop, Hinge’s $3 billion market capitalization marks a steep drop from its peak $6.2 billion valuation during its 2021 Series E round, led by Tiger Global. That valuation, typical of the pandemic-era funding boom, has since proven unsustainable across many sectors.
But Hinge Health isn’t alone in this reality check. Reddit went public last year at around $5.4 billion—nearly half of its 2021 private valuation. ServiceTitan saw a similar dip, IPOing at $6.3 billion after being valued at $7.6 billion in its 2022 Series H round.
Investors, however, are becoming more forgiving of down-round IPOs. The market now views them less as a red flag and more as a reflection of post-2021 valuation rationalization—especially for companies with solid fundamentals and real revenue growth.
A Leaner, Public Hinge With Long-Term Ambitions
Hinge Health raised $437 million from its IPO, with $237 million going to the company to fuel future growth. The remainder went to existing investors. Insight Partners (19%) and Atomico (15%) are the two largest outside shareholders, according to Hinge’s latest S-1. Co-founders Daniel Perez and Gabriel Mecklenburg still hold significant stakes, with 18.9% and 8.2%, respectively.
Founded in 2013, Hinge Health specializes in treating musculoskeletal (MSK) pain—like back, knee, and joint issues—through digital therapy programs enhanced by wearable sensors, computer vision, and remote care teams made up of physical therapists, physicians, and coaches. It’s a tech-forward solution to a widespread, chronic health issue that costs the U.S. economy billions each year.
The company’s IPO comes as competitors eye the public markets as well. Omada Health, which tackles chronic disease management and also plays in the MSK space, filed to go public earlier this month. Sword Health, another leading digital MSK platform, was valued at $3 billion last year and has hinted at a 2025 IPO if growth holds up.
As the market for digital health matures and the hype-driven valuations of 2021 fade, Hinge Health’s IPO may signal a new era: one where resilience, not just rapid growth, drives public investor confidence.
