The news: Virtual physical therapy company Hinge Health filed to go public on Monday.

More on Hinge: It uses computer vision technology to track body movement and provide real-time audio and visual feedback. Clinicians use the data to adjust care plans and monitor progress of patients with musculoskeletal (MSK) conditions.

Hinge’s solution is primarily sold to self-insured employers and health plans that offer the company’s services as a covered health benefit for members. Hinge says that it has over 2,250 enterprise clients, giving access to its offerings to over 20 million people.

Hinge has raised over $1 billion in funding and was valued at $6.2 billion in 2021. The company’s revenues in 2024 grew 33% to $390 million. Its net losses fell from $108 million in 2023 to about $12 million last year.

Zooming out: The pandemic fueled a surge of public exits by digital health companies. But there were very few IPOs afterward.

• 37% of the active public digital health companies IPO’d in 2021, per a recent analysis from Rock Health’s founder. More digital health companies filed to go public that year than the previous 10 years combined.
• Following a year when no digital health companies went public in 2023, we finally saw a few digital health public exits last year.

The final word: Hinge has a lot going in its favor as it prepares to go public, beyond improving its financials last year.

1. Hinge believes it has expanded market opportunity.

The company says that the number of people who can access Hinge’s platform only represents 5% of its total addressable market. Hinge cited further penetration in the self-insured employer, Medicare, and Medicaid markets as an opportunity to reach a few hundred million more patients.

2. Hinge has a defined proof of concept.

Hesitant investors who have been watching the lack of public digital health activity will need evidence that Hinge’s offerings drive savings for customers while improving patient outcomes.

• Hinge cited a study in its S-1 filing that the company’s platform saves employers an average of ~$2,400 in medical claims per member compared with a control group.
• And participants using Hinge reported a 68% average improvement in pain after three months.