Blog | 6/17/2025

Digital Health Exits: IPO, Private Funding, or Merge?

Successful digital health fundraising requires more than strong technology—it demands strategic timing and a clear path to scale. Over the past decade, companies have pursued a range of exits, including IPOs, private funding, mergers, and, briefly, SPACs. The SPAC boom of 2020–2022 provided a shortcut to public markets, but many digital health companies faced harsh valuation corrections, underscoring the risks of premature exits.

What truly sets winners apart in this landscape is a combination of profitability, measured growth, and strategic timing. Companies like Hinge Health (NYSE: HNGE) demonstrate that reaching profitability and achieving sustainable scale empowers them to go public on their own terms, capturing strong investor confidence. Hinge and Omada Health (NASDAQ: OMDA) both pursued IPOs during similar windows, but Hinge’s clear margin advantage and proven growth trajectory enabled success, while Omada, operating in high-cost therapeutic areas without established profitability, struggled to maintain post-IPO momentum. Market timing alone isn’t enough—without real financial footing, even strong brands can falter under public scrutiny.

In contrast, Sword Health continues to stay private, focusing on growth and operational versatility. Its $380M in total funding and $4B valuation reflect a deliberate, long-term approach. CEO Virgilio Bento plans for a potential IPO only after achieving scale across multiple care verticals, aiming for 2028.

In today’s environment, the most successful digital health exits are distinguished by their careful balance of growth, profitability, and optionality. Rushing to put a company “on the block” can cost founders leverage and erode opportunity. Winners are those who maintain flexibility, whether by choosing robust private funding, merging at the right inflection point, or entering public markets only when fully ready to deliver at scale.