For venture-backed businesses, an IPO can feel like the end of a long road, when really, it’s only the beginning. At FirstMark, we have been investing in digital health for over a decade, and yet it feels like we are just getting started. In fact, the next 5 years in digital health will be the most important chapter yet.

Consumer mindsets are shifting toward proactive health, empowered by more data to make better decisions. Engagement with the healthcare system overall is increasingly marked by consumer agency, data visibility, and connected care.

Below, we dive into the Hinge Health IPO, the Omada Health S-1, and outline our view on the future of digital health.

First, let’s look at a quick snapshot of who is going public and why.

Hinge Health IPO

Hinge did not need to go public from a cash perspective. In 2024, the company trimmed R&D and G&A costs while accelerating S&M spend, and it paid off. The company was profitable in Q1 and even managed to accelerate growth, increasing to 50% year-over-year growth in Q1, up from 33% in 2024.

This shift was possible due to the leadership position that Hinge has established within an important chronic condition. Hinge brings musculoskeletal (MSK) care under one platform, offering a mix of software and services, including guided exercise therapy, 1:1 coaching/physical therapy sessions, and motion tracking technology for exercise feedback.

More recently, Hinge has leveraged this expertise to increase reliance on AI-based coaching, which reduces human care costs by 95%. We are in the early innings of seeing healthcare services automation, and it couldn’t come at a better time. A well-reported shortage of healthcare workers has led to many patients waiting for treatment.

Hinge has shown an impressive ability to introduce scalable, high-quality care, reportedly serving over 1 million members since launch. Hinge sees a patient NPS of 87, well above industry averages, and high retention (98%) because of the meaningful impact that the platform has on their health. They also report that patients see a 68% reduction in pain and a 58% reduction in depression and anxiety after only 12 weeks.

Chronic conditions require ongoing management. Hinge makes that easy, meeting patients where they are and driving real outcomes. The company sells primarily to self-insured employers and health insurance plans today. Their 2.2k clients represent 20M covered lives, which is still only a small portion of the 1.7B people impacted globally by MSK conditions.

So, while Hinge did not need to go public from a cash and profitability perspective, their IPO unlocks additional credibility with their conservative buyer base and helps solidify their category leadership in a consolidating market.

Omada Health S-1

Omada Health also offers services in the MSK space, but they started out focused on serving patients with diabetes. The platform has evolved into an integrated digital health platform for chronic conditions that combines behavioral science, human coaching, connected devices, and data-driven software.

They focus on selling to self-insured employers, where members can enroll as a covered benefit. They offer an enhanced care track for GLP-1s paired with clinical oversight and coaching, so far serving 50k individuals across 200 employer clients. 

Notably, Omada takes an outcomes and engagement-based approach. Cardiometabolic engagement was 55% at 12 months, and there are ongoing efforts to drive up long-term participation and health outcomes. Strong performance to date has driven 90% client retention over three years, driven in part by patient outcomes, including sustained weight loss and improved blood sugar and blood pressure.

Healthier patients drive real outcomes for employer sponsors as well. Omada’s Type 2 diabetes patients who participate in remote monitoring and coaching see $3.9k in cost savings per member over 3 years.

The mix of hardware and software has historically been a drag on margins, but Omada has driven gross margin up to 60%. Combined with the increased operating leverage they’ve achieved via channel partnerships, the company is on track to reach profitability late 2025 or early 2026.

In a world where companies typically need scale and profitability in order to go public, it will be interesting to see how the public markets respond. Fortunately for Omada, it operates in one of the largest and most durable segments of healthcare. Chronic conditions account for 90% of US healthcare costs and impact at least 156M Americans. Segments of these categories can be crowded spaces, so Omada’s scale and focus on outcomes provide key advantages.

These latest filings will be bellwethers for digital health, both setting and reflecting the conditions that emerging companies will face.

Conditions for the Digital Health Market

At FirstMark, we are excited about the opportunity within digital health for a few key reasons:

• Demand is massive and durable: Healthcare is ~18% of GDP, with chronic conditions driving $1T in annual spend (+ growing), compounded by the overall aging population.
• Supply is significantly constrained: Labor supply shortages are pronounced across clinicians and administrators, aggravated further by COVID burnout.
• Payor is evolving: With more people on high-deductible plans amid the rise of self-insured employers, consumers are now footing more of the bill. This shift has made people pay attention. Health is no longer a reactive service paid for by an employer – it’s becoming a proactive, consumer-led category where individuals expect value and personalization. Cash pay products like supplements, diagnostics, and coaching are growing as people look to avoid the traditional “pharma first” model. Healthcare innovators can rapidly reach meaningful scale before engaging with payor partners. Even then, we’re seeing a tiering of the payor, with self-insured employers moving first to adopt innovation.
• Technology inflection point: More structured health data is available than ever before, and consumers are actually engaging with it, from tracking their own biometrics to understanding personal genetic risk. This creates fertile ground for LLM-native care delivery and AI-enabled coaching. It’s a unique moment for faster, cheaper, smarter care. Automation unlocks scalable opportunities across triage, diagnostics, and follow-up, with strong unit economics and defensible data moats.
• Legacy providers can’t adapt: In many industries, scale enables AI advantage — but in healthcare, incumbents are constrained by outdated systems, complex incentives, and regulatory inertia. They struggle to meet patient expectations on speed, access, and clarity. This has created an opening for consumer-first brands like Function, Ro, Levels, and Oura, who are earning trust and loyalty. Over time, these players will earn the right to plug into the system – from the outside in.

What Winning Looks Like

Digital health companies see a wide range of revenue multiples, largely dependent on Rule of 40 performance. For example, Doximity trades at 15x revenue, while GoodRx trades at 2x. Long term, the winners will look more like tech companies than traditional healthcare services. They will:

• Build in large, recurring-revenue categories, like chronic care, preventative health, and musculoskeletal conditions, where need is constant and value can be clearly quantified.
• Combine B2C speed with B2B defensibility, using consumer-grade experiences to win trust and scale quickly, then layering in enterprise distribution to build durable channel advantages.
• Leverage proprietary data loops from multi-modal inputs (sensors, self-reported outcomes, longitudinal health records, etc.) to improve outcomes, automate delivery, and deepen moats.
• Be led by ‘embedded-outsider’ founders, who bring fresh perspectives and pair them with deep domain expertise through team building to ensure clinical and regulatory fluency. The Hinge, Function, and Ezra founders all entered this market through personal experience, and it’s that empathy with the consumer that creates a powerful opportunity to build a better system.

The IPOs of Hinge and Omada aren’t just financing events. They are proof that digital health companies can combine strong unit economics, real-world outcomes, and scalable platforms to reach the public markets on their own terms.

The most important companies in this space will marry consumer growth loops (data, engagement, retention) with the durability of B2B relationships (clinical trust, interoperability, compliance). When applied to high-need areas like chronic care and preventative health, this model unlocks the path to IPO-scale platforms.

At FirstMark, we’ve backed digital health founders for over a decade. But with breakthroughs in AI, new care delivery models, and mounting pressure on the system, we believe this next chapter is the most important yet. If you’re a founder building the future of healthcare, we’d love to hear from you.