Sword Health has secured $40 million in new funding, and has pushed the company’s valuation to $4 billion.
That marks a 33% increase from last year’s $3 billion. General Catalyst, a returning investor, led the round.
Despite being profitable, Sword Health did not urgently need the capital. Founder and CEO Virgílio Bento clarified the reasoning.
The goal was to update the company’s valuation and prepare for strategic acquisitions. Therefore, flexibility without depending on public markets was the purpose.
Full-Spectrum Digital Care
Founded ten years ago, Sword Health started as a digital musculoskeletal care provider. Later on, it expanded into pelvic health and mental health.
Today, it earns an impressive $240 million in annual revenue and remains cash-flow positive.
Bento had previously considered a public listing in 2025, however, he has now ruled that out. He stated that an IPO will not happen before 2028.
A Deliberate Delay
While peers like Hinge Health and Omada have recently gone public, Sword is choosing a different path.
Bento has taken time to explore the implications of going public. Over recent months, he spoke with CEOs of public companies and investment bankers and his findings changed his outlook.
“If you ask me why we shouldn’t IPO, I can give you ten reasons,” Bento said. “If you ask me why we should, I cannot find one.”
He questions the usual benefits of an IPO: raising capital, building brand awareness, and providing employee liquidity.
In Bento’s view, private companies can achieve these goals without going public. He cited successful private firms like Ikea and Lego.
He also pointed to Databricks, which raised $10 billion without listing on a stock exchange. Bento believes strong companies can thrive privately, given the right investors and strategy.
Phoenix
Sword Health’s future revolves around its AI tool, Phoenix. Initially developed to support virtual physical therapy, Phoenix now assists in pelvic care as well.
Bento plans to scale Phoenix to support care in areas like cardiovascular health, gastroenterology, and speech therapy. The vision is to provide broad, AI remote care.
However, Bento insists on demonstrating success at scale before entering public markets. He wants proof across multiple care verticals.
Future Plans
The new funding will support acquisitions and product expansion. Yet Sword Health is already thinking about its next raise.
Bento hinted at a structured pattern. Last year, it raised $30 million at $3 billion, this year, $40 million at $4 billion. Next year, he expects to raise $50 million at $5 billion.
“I like the numerical symmetry,” Bento said. “I think it’s fun.” This pattern may seem playful, but it reflects strategic intent.
Private Yet Employee-Focused
Remaining private does not exclude employee benefits. Bento plans to launch a tender offer soon that will allow early employees and shareholders to sell some shares.
It’s a method used by private firms to offer liquidity without an IPO. It ensures alignment without external market pressure.
Trusted Backers
Sword’s latest round brings total funding to $380 million. In addition to General Catalyst, other investors joined the round.
These include Khosla Ventures, Comcast Ventures, Lince Capital, Oxy Capital, Armilar, Indico Capital, and Shilling.
