Hinge Health, the San Francisco-based startup that offers a digital solution to treat chronic musculoskeletal (MSK) conditions — such as back and joint pain — has closed a $90 million Series C.
The round is led by Bessemer Venture Partners, with participation from Lead Edge Capital. All of Hinge's existing institutional investors followed on: Insight Partners (which led the Series B), Atomico (which led the Series A), 11.2 Capital, Quadrille Capital and Heuristic Capital.
Founded in 2015 (and originally based in London), Hinge Health primarily sells into U.S. employers and health plans, billing itself as a digital healthcare solution for chronic MSK conditions. The platform combines wearable sensors, an app and health coaching to remotely deliver physical therapy and behavioral health.
The basic premise is that there is plenty of existing research to show how best to treat chronic MSK disorders, but existing healthcare systems aren't up to the task due to funding pressures and for other systematic reasons. The result is an over tendency to use opioid-based painkillers or surgery, with poor results and often at even greater cost. Hinge wants to reverse this through the use of technology and better data, with a focus on improving treatment adherence.
In a call and in subsequent message exchanges, Hinge CEO and co-founder Daniel Perez tells me the company is already helping two out of three elected surgeries be avoided, "delivering a 3-4x ROI across our book of business." More broadly, Hinge is helping four in five participants achieve "a meaningful pain reduction," with the average person on its program reducing their pain by 69%, claims Perez.
"One thing we’re particularly happy about is that we’re cutting anxiety and depression rates by more than half," he adds. "This is really important, because a lot of people don’t appreciate how much mental health comorbidities, like depression or anxiety, can impact chronic pain."
Following Hinge's Series B, Perez says he spent the first half of 2019 building out his team, with a particular emphasis on "executive management, R&D, clinical, and commercial footprint." The company's headcount sits at around 225 today, with plans to increase that to more than 400 in the next 12-18 months.
Currently headquartered at Spotify’s former San Francisco offices, where around half of the staff is based, Hinge is planning to move to larger premises in the next three months.
"We have a clinical team 10x larger than any of our competitors," he says. Many of these are health coaches spread throughout the U.S., who are tasked with supporting patients proactively based on the data Hinge has access to.
"Most companies are really good at enterprise or D2C... but in healthcare, while the purchasing decision is often made by an enterprise (employer, health plan, hospital etc.), the end-user is a patient who makes their own decision whether to engage. Early on we realised we needed to be maniacally focused on customer service, from both the enterprise and end-user perspective. That really paid off, because not only did our enterprise book triple in six months, but we’ve maintained 100% customer retention."
To that end, Perez claims that four in five employers with a digital MSK solution have bought Hinge Health. This has seen the company's enterprise customer base triple in the last six months, resulting in 200 enterprise implementations.
Meanwhile, Perez wouldn't be drawn on Hinge's Series C valuation, although one source tells me it was around $420 million. What he did confirm, however, is that he and co-founder Gabriel Mecklenburg still control half of the board's voting rights. He also says the round was oversubscribed and Hinge could have raised $125 million plus, but "chose to pull back."
Adds Bessemer Venture Partners Partner Steve Kraus, who led on behalf of the San Francisco-headquartered venture capital firm: "U.S. employers and health plans are looking not just for outcomes, but also meaningful engagement and -- critically -- enterprise experience and maturity. That’s why we’ve invested in Hinge Health.
"Rarely have I seen customers more enthusiastic about a product. In all of my customer reference calls (and there were many), the praise for Hinge Health’s product and especially their ease of implementation was universal."