Steve
O'Hear@sohear / 7:00 AM CST • February 4, 2020
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.”
https://techcrunch.com/2020/02/04/hinge-health-series-c/
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