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Sword Health Hits $3 Billion Valuation with $130M Raise

Sword Health, a pioneer in AI-driven virtual physical therapy, has secured a remarkable $130 million in funding
June 5, 2024

Sword Health, a trailblazing virtual physical therapy startup harnessing AI, has recently closed an impressive funding round, raising a substantial $30 million. Moreover, in a unique move, the company allowed its employees to sell equity worth a staggering $100 million to both new and existing investors, with Khosla Ventures leading the charge.

This latest investment round marks a significant milestone for the nine-year-old company, propelling its valuation to a remarkable $3 billion, marking a remarkable 50% increase from its previous valuation of $2 billion in the Series D round back in November 2021.

Initially planning only a $100 million secondary round to facilitate the sale of shares by employees and early investors, Sword Health's CEO and founder, Virgílio Bento, revealed to TechCrunch that the overwhelming demand led to an oversubscription, prompting the company to also raise a primary round of $30 million, thereby updating its valuation.

While Sword Health is poised to achieve profitability by year-end and didn't necessarily require the additional capital influx, Bento emphasized the importance of signaling growth amidst challenging fundraising conditions, particularly given the skepticism surrounding valuations from the previous year.

The infusion of $30 million will not be allocated for operational expenses but rather secured in the company's reserves, serving as a testament to Sword's financial stability and strategic foresight.

With a total funding amount now standing at $340 million, Sword Health is bolstering its position in the market, especially as it competes head-on with rivals like Hinge Health, a fellow virtual therapy platform, which was valued at $6.2 billion in October 2021.

Looking ahead, Sword Health harbors aspirations for an IPO, contingent upon sustained growth and favorable market conditions. In the interim, the company is intensifying its AI capabilities, introducing a human-like voice named Phoenix to enhance patient interactions across its musculoskeletal and women's pelvic health therapy offerings, marking a significant advancement in its technological prowess and user engagement.

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