Virtual care and artificial intelligence company Sword Health said Tuesday it had closed a $130 million financing round that increases its valuation to $3 billion.
Sword pairs AI and motion tracking technology with in-house clinicians to provide virtual physical therapy programs to patients. The New York City-based company, which has previously raised from well-known venture capital firms including Founders Fund, General Catalyst and Khosla Ventures, declined to share which firms led or participated in this latest round.
Read more: What Waystar’s IPO means for digital health
Of the $130 million, $100 million of the funding is secondary, which are shares purchased from existing employee shareholders. The amount will go toward providing liquidity to current and former employees as well as early investors. The remaining $30 million is new capital to be used for growth.
Co-founder and CEO Virgílio Bento re-emphasized the company’s long-term plan to go public but didn't provide a timeline.
“There is no active process for that to happen,” Bento said. “That could happen in 2025. Honestly, that could also happen in 2026. It's going to be dependent on the macro [economic] environment. It's going to be dependent on our ability to execute on our plan.”
Bento said employee-owned options were bought up by investors to help finance the deal. He said it was important for the company to update its valuation, which was last publicly shared in November 2021 at $2 billion.
“Honestly, no one really believes those 2021 valuations given how crazy the market was,” Bento said. “We decided that probably it was good to update our valuation, which showcased a 50% increase in valuation. I think [it] is an important vote of confidence from the market.”
Public markets for healthcare startups could be heating up again. On May 28, healthcare payments software maker Waystar Holding said it is seeking to raise as much as $1.04 billion in an IPO that would be among the year’s biggest.
Along with the funding deal, Sword also announced a new AI care specialist service that interacts with patients autonomously. The tool provides clinical insights as well as feedback on treatment plans and care sessions. The company said the tool, dubbed Phoenix, is capable of delivering clinical-grade care and adjusting a plan based on patient feedback.
Sword said the tool would first launch with its physical therapy program in the coming months and then to its women’s pelvic health program later this year. The company provides care to patients through its employer and health plan customers.
