Hinge Health Sparks Hope with 17% IPO Pop in NYSE Debut

Digital health startup Hinge Health HNGE saw a 17% IPO pop on its first day of trading on the New York Stock Exchange, closing the day at $37.56 a share. Hinge and its selling shareholders raised $437 million in the IPO, which priced shares at $32 each for a fully diluted market cap of about $3.5 billion.

The debut is a long-awaited windfall for early investors Atomico, 11.2 Capital, and Insight Partners. It’s the first major public listing of a VC-backed healthtech company since 2021.

But the valuation is sobering for its later investors, another reminder that public markets are still valuing tech stocks at a discount from 2021 highs. Hinge’s last two private financings in January and October 2021 valued the company at $3 billion and $6.2 billion, respectively. Coatue and Tiger Global led both rounds. Hinge stockholders, including Tiger Global and Insight, sold about 5.14 million shares in the IPO.

In Hinge’s public listing, most of the investor-held shares will convert to common stock, but in an unusual move, Tiger elected not to convert some of its preferred shares from the Series E round.

Hinge’s financial position is strong despite the valuation reset from its 2021 heyday. Its first-quarter revenue grew 50% to $123 million, up from $82 million in the first quarter of 2024. It’s also narrowed its losses substantially, from $108 million in 2023 to $11.9 million last year.

Hinge offers virtual physical therapy to people with musculoskeletal conditions, a demographic that includes approximately 40% of US adults. Hinge’s product market fit is strong. Its client base spans 49% of Fortune 500 companies, and its gross margin in the fourth quarter was 82%. The optimistic pricing and first-day performance may offer a push for other health tech startups waiting in the wings to debut after unexpectedly shaky markets dampened IPO sentiments.