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Sword Health

Sword Health

Digital Physical Therapy

Andrew Kuzemczak
April 01, 2025

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Hi friend,

Welcome back to Future Human! I hope you all enjoyed my first launch into software last week with a dive into Isomorphic Labs. You may not have seen, but Isomorphic announced just a few days after my newsletter that they raised a $600 million round. Coincidence? I think not.

You’re welcome Isomorphic Labs and Google. I’ll be awaiting my equity compensation.

Google Ventures even replied to my LinkedIn post about it. A subtle flex?

I’d say far from subtle.

Okay, now back down off the horse, I’d like to welcome you all to our eighth edition of Future Human. We are remaining in the AI/digital/online world this week with a look at the future of physical therapy. Here at Weill Cornell, we have not ventured into musculoskeletal (MSK) yet (that’s for the fall), but I thought a head start was in order. As a medical student, I always wonder where AI-’providers’ will take over first. Upon further research, I think I found a top candidate.

With that, let me ask you:

When treating your chronic back or joint pain, would you accept the care of an AI-’caretaker’ or digital physical therapist if it meant you could remain at home, track your progress, and receive the same level of support as in-person?

The Story

The origin stories for each of the startups I cover range in intensity from a simple intellectual curiosity to a life changing or traumatic event. For Sword Health, it may top the list for intensity and meaning. Sword was founded in 2015 in Portugal by Virgílio Bento and Márcio Colunas.

Virgílio's inspiration began at the age of 10 after a car accident left his brother in a coma for a year. This would launch his family into a 12-year recovery process, where he witnessed the challenges families faced in accessing physical therapy. Virgílio would go on to study Electronics and Telecommunications Engineering at Universidade de Aveiro, earning his master’s degree in 2007 and his PhD in Electronic Engineering in 2012.

Despite his PhD, Virgílio would find a co-founder, Márcio, who brought even more technological experience and obsession. Also attending Universidade de Aveiro, Márcio had an interest in technology beginning at nine years old. Once at the university, he would meet and collaborate with Virgílio on the Stroke Wearable Operative Rehabilitation Device (S.W.O.R.D). Their creation used 3D wearable motion sensors, a vibratory module, and AI to provide real-time feedback for stroke rehabilitation patients, allowing patients to recover from home. Their tech would show promise in clinical trials in 2013, leading to the founding of Sword Health just two years later.¹^,²

In contrast to the rapid growth they have experienced more recently, Sword Health’s first few years were spent quietly in the lab refining their product. The now-called Digital Therapist would, in 2016, become the first FDA-listed technology of its kind. Its launch would validate the team’s mission to improve physical therapy access and precision with AI and wearables for millions of patients globally.³

After four years of development, Sword Health would raise their $8 million Series A from Khosla Ventures in 2018. In 2020, they would launch in the U.S. and sign their first customer in Concordia Plans. Then came 2021, when—despite the global COVID-19 pandemic, or rather, because of it—funding for healthtech startups was easier to secure than monopoly money. They would raise…wait for it…a $25 million Series B in January, $85 million Series C in June, and $163 million Series D in November.

Their $2 billion valuation in 2021 would leap to $3 billion last year, placing Sword Health as one of the top players in the digital physical therapy space.

“At Sword, we’re using AI to fundamentally reinvent how people access and receive care—in order to fulfill our mission of freeing the world from pain.”

Virgílio "V" Bento, founder and CEO of Sword Health

The Tech

As I mentioned above, Sword Health built its foundation from Colunas and Bento’s graduate school research project (shoutout academia). That mix of motion sensors, vibratory modules, and early AI functionality now has morphed into a streamlined kit delivered to new patients who seek physical therapy.

Individuals turn to Sword Health for all musculoskeletal issues, including pain in the back, shoulder, neck, hip, knee, elbow, ankle, and wrist. Once they sign up, they receive a Sword kit including their tablet, wearable, quick start guide, and digital physical therapy program (with support from a real physical therapist).⁴

With the wearable device and the tablet camera, patients launch into a personalized 8-12 week PT program tracking their movement, steps, vitals, and overall therapy progress. Although the personalized program is crafted by physical therapists (human ones this time, I swear), the remaining data collection and analysis is AI-led, making Sword Health much more scalable than its competitors. Your (human) PT will review your results and provide feedback after each session, but AI remains the work horse here.

Once you finish your program, you can even keep the Digital Therapist Kit as long as you stay active. Sword Health will even provide a free exercise program to keep you stronger for longer. Discontinuation for 14 days will trigger them to come find you, I mean reach out sweetly to collect the kit for a future member.

So besides scalability, what else does the technology offer? And does it really work when we look at clinical outcomes?

Well we will get more clinical in the Sick section below, but results are pretty clear about all other ways the technology helps. In 2021, Sword became the first, and at that time only, MSK care provider to have obtained both Level 1 and Level 2 certification from the Validation Institute.⁵ “What does this mean?” you ask.

I did not know an organization like Validation even existed, but apparently Level 2 came first (confusingly) and verified that clinical outcomes were significantly improved by the digital intervention. Next, their Level 1 certification describes medical cost savings compared to a baseline of traditional care. Swords’s savings were the largest of any digital MSK solution. On average, their platform offered a savings per member per year of $2,472 — 10% greater savings than its nearest competitor. The cost savings were primarily driven by lower spend on expensive treatments like surgery and invasive procedures, with additional savings on office visits, imaging, and other forms of therapy. This translates to a 2.47x ROI, a value far above its competitors.⁵

Okay, I know we have swung a bit into the Economy section, so let me return to tech.

TLDR; the technology —> higher PT adherence —> improved therapeutic results —> reduced surgery need. In 2024, a separate validation-focused consulting firm I also did not know existed (Risk Strategies Consulting) ran their own study on the system and its tech and found a 50% reduction in MSK surgeries and lower need for long term therapy. Their cohort analysis spanned 2,722 Sword members and 5,176 controls, evaluating continuous engagement and outcomes.⁶ It has become clear that digital MSK solutions from Sword Health provide clinically meaningful improvements in pain and function that are comparable to in-person therapy, with significant potential to reduce overall healthcare spending.

Sword has taken this promising data and run with it, launching new products every year to offer multiple patient populations the care they need. Allow me to explain:

Thrive⁷
- Core product, offering digital, AI-driven physical therapy for chronic joint and back pain. Combines interaction and feedback from PTs with its AI monitoring and feedback tool, Phoenix.
Phoenix⁷
- AI Care Specialist, offering patients real-time dialogue during sessions, adapting to progress and verbal feedback.
Bloom⁸
- Women's pelvic health solution, offering therapy for sexual health issues, bowel or bladder problems, and pelvic disorders. Patients matched with Pelvic Health Specialist and provided a Bloom Pod, a biofeedback sensor that monitors pelvic floor muscle activity.
Move⁹
- Movement health solution designed to help members begin their physical activity journey and eventually live pain-free. Combines data from user’s wearable (Sword, Apple, or Fitbit) with guidance from a personal trainer.
Predict¹⁰
- AI solution to identify, engage, and treat members who are at-risk for needing surgery. Identifies members who have a higher likelihood of needing MSK or pelvic surgery up to eight months before a decision to operate is made.

You might be wondering what’s with all the names and product types. I thought the same thing, and discovered something unique. From a corporate organization standpoint, Sword Health adopts a structure centered on independent product solutions, or “waves”. A general manager is brought on (normally an ex-founder) to lead the wave and they are given $1 million (like a seed round) to achieve product-market fit in 12 months. The money goes toward hiring talent and developing the product as soon as possible. If product-market fit is achieved, additional funding (like a Series A) is provided.

Seems very foreign, but it has been successful. The Bloom product generated as much revenue in 2024 as all of Sword Health in 2022. It is a very flipped and decentralized structure, but I have to admit, I love it.

The Market

Our market section is traditionally an equally weighted evaluation of top competitors and a look at the overall category trajectory. This will not be that.

The reason I chose to cover Sword Health this week (I guess I should have mentioned this at the top), is because the OG of digital MSK care just filed to IPO. When I saw that, I knew a look at what startups were challenging them was in order. I am, however, getting ahead of myself.

Sword Health is obviously in the digital health market. In 2022, the entire market was valued at $217 billion and it is projected to reach $1.6 trillion by 2032 growing with a CAGR of 25.3%. That actually competes with the insane growth of AI drug discovery from last week.¹¹^,¹²

Just three years ago, only 10% of employers offered solutions for employees with MSK injuries. With that said, 70% expressed plans to adopt some form of MSK treatment. The opportunity to offer every employee MSK care is massive, it is confirmed growing, and the digital model to offer it is all the rage in medicine — it is a match made in healthcare.

With an opportunity like that, you are destined to have competition. Major players in this landscape include Hinge Health, Kaia Health, and IncludeHealth. I dove into each, but Hinge Health remains our competitive focus (they are the team that filed to IPO in March).¹²^,¹³^,¹⁴

Kaia Health: founded in 2016, they offer digital care for MSK pain management and chronic obstructive pulmonary disease (COPD). Their app analyzes patient movement to provide feedback on form and posture.
IncludeHealth: founded in 2018, they provide digital PT through phones and tablets without needing sensors. They raised $11 million in 2023.

Okay now for tonight’s entertainment! Hinge Health vs. Sword Health

Hinge Health: founded in 2015, Hinge also provides digital therapy for chronic MSK conditions with some AI-powered motion tracking and personalized exercise plans. They raised $600 million in a Series A in 2021 with a $6.2 billion valuation. Unlike Sword, Hinge focuses on combining wearable sensor data with human-led PT analysis to personalize care. Consider Sword the AI-obsessed younger sibling.

Both companies use computer vision to track patient movements, but Sword Health remains the fully AI-driven, sensor-based PT solution — focused on automation, global expansion, and a therapist-light journey. Their thesis, as described above, is simple. Allowing individuals to receive care without needing a 1-on-1 human physical therapist allows 1000’s more to be treated quicker, cheaper, but with the same quality.

When I say therapist-light, I mean it. Sword recently said their AI and hardware would allow each therapist on their team to support 700 patients. Quite the number.

The Sick

According to the almighty World Health Organization (WHO), up to 33% of the global population has some form of chronic musculoskeletal pain. For those interested, musculoskeletal pain is defined as acute or chronic pain that affects bones, muscles, ligaments, tendons, and nerves. Chronic MSK pain has been shown to increase drug consumption, frequency of sick leave, and exacerbate disability pensions. Certain types, like low back pain (LBP), is practically ubiquitous. Nearly 40% of adults have LBP, 20% have neck and shoulder pain, and 15% have knee pain.¹⁶ Wow, adulthood sounds like a blast.

How we treat those with MSK pain is similarly problematic. We overuse (nearly) everything:¹⁶

Overuse of imaging: 69% of general practitioners refer patients for radiography at first presentation. There remains a poor relationship between imaging and symptoms, and making a recommendation for imaging in the absence of “serious pathology” red flags is not recommended.
Overuse of opioids: efficacy of opioids for MSK pain management is questionable for both chronic and acute pain conditions. The early use of opioids has even been associated with poorer outcomes in LBP.
Overuse of surgery: the rates of knee arthroscopy, shoulder subacromial decompression, and rotator cuff repair continue to increase markedly, even though surgical outcomes are comparable with exercise-based rehabilitation or sham surgery. Over 50% of MSK surgery is unnecessary¹⁷
Underuse of education: only 20% of patients with LBP are given advice and education in a primary care setting from their GP.

As compared to pain ‘management’ approaches, physical therapy attacks the source and aims to eliminate it. It also does this while never cutting you open. Few individuals, even among the surgeons I know, recommend surgery when physical therapy can achieve the same result. As for digital vs. in-person options, a recent Nature paper showed digital PT to be as effective as in-person PT with 2x the engagement.¹⁸ So we have an innovative approach to a gold standard for pain elimination with similar outcomes and improved engagement, all from the comfort of ones own home. Arguably a patient and physician’s dream.¹⁹^,²⁰

Like any good startup, Sword Health boasts a lot of impressive numbers across their website. After completing Sword programs, 64% of members are freed from pain, 43% no longer report productivity impairment, 50% no longer screen positive for anxiety.

In sum, with these studies and work of Sword and competitors like Hinge, there is little doubt patient’s can adhere to digital PT and achieve similar results as in-person. Like with any innovation <10 years old, however, it remains to be seen how long-term the digital vs. in-person methodologies compare.

The Economy

I would venture to say of all disease areas we have explored, few are more obviously economically impactful than musculoskeletal conditions. From acute pain to hereditary diseases, muscle and bone disorders can alter a workforce, change an industry, and handicap a nation.

In 2018, the World Economic Forum took this thesis on by surveying 1.9 million employees in a report that would be titled “Global Burden of Chronic Musculoskeletal Pain in the Workplace”.²¹The report would show musculoskeletal disorders (think back pain, neck pain, and joint pain) as the second most common reason for absenteeism in the world. One spot ahead of mental health conditions and only beat out by illnesses including cold and flu.

In the U.S., back and neck pain accounts for 128.1 million lost days of work annually and $42.4 billion in lost productivity. JAMA has estimated lower back pain (LBP) alone among working-age Americans costs the healthcare industry $86 billion yearly. LBP is also the leading cause of workers’ compensation claims.

Besides absenteeism, the economic costs associated come from an early exit from the labor force, co-morbidities (mental health in particular), replacement labor (challenge to replace skilled workers), training needs, and (if you continue working) increased safety incidents for those with MSK conditions.

MSK pain is often less acute and deadly, thereby collecting less attention than something like myocardial infarction (heart attack) or cancer, but it remains common and costly. Additional solutions must be offered.

I do not believe it is a shock to anyone to see back pain, joint pain, arthritis, or any of these MSK conditions impacting the globe’s adults and challenging the global workforce. You hear it from your friends, feel it yourself, and know that (normally) old fashioned PT is your next step.

Now, however, there may be a new path.

My Thoughts

Some healthtech innovations are flashy—artificial hearts and lab-grown bones come to mind. Others, less so.

Flashy or not, musculoskeletal pain and disease impact so many more individuals around our globe than heart failure or bone fractures. An elegant solution here could save countless lives that we rarely consider.

This is a valuable principle for any current or future founder. The most impactful innovations are often the simplest—transforming everyday problems in overlooked categories and changing far more lives than high-profile tools for rare cases.

Sword Health is a perfect example of digital health well executed. With a skyrocketing market, proper competition, and proven technology, they are perfectly positioned. I look forward to watching them change the world, one AI PT at a time.

To more lives saved,

Andrew

I always appreciate feedback, questions, and conversation. Feel free to reach out on LinkedIn.