Sword Health Raises $40M, Pushes IPO to 2028 as Growth Strategy Shifts
Although the company is cash-flow positive, it is postponing a public listing as it focuses on expanding its AI-driven care model and strengthening its position through private funding.
(Photo: SBR)
NEW YORK, June 17, 2025 — Sword Health, a New York-based digital health startup using artificial intelligence to deliver remote care, has brought in $40 million in new funding, pushing its valuation to $4 billion, up 33% from last year’s $3 billion.
The round was led by General Catalyst, a returning investor. It brings Sword’s total capital raised to $380 million. Other participants include Khosla Ventures, Comcast Ventures, Lince Capital, Oxy Capital, Armilar, Indico Capital and Shilling.
Despite being cash-flow positive, Sword’s founder and CEO, Virgílio Bento, said the new capital will be used to keep the valuation current and create a buffer for upcoming strategic acquisitions.
“We didn’t need the money,” Bento said. “But we wanted to have dry powder ready.”
Founded 10 years ago, Sword began by offering virtual physical therapy before expanding into pelvic and mental health services. While a public offering was once on the table, Bento had previously said an IPO by 2025 was plausible — that timeline has now shifted significantly.
“It’s going to be much later than everyone expects,” he said.
Bento’s decision follows a period of reflection and learning. He has spent recent months meeting public company CEOs and investment bankers to understand the realities of managing a listed business.
“At the end of that education period, I realized that if you ask me why we shouldn’t IPO, I can give you 10 reasons,” Bento said. “If you ask me why we should IPO, I cannot find one.”
Citing firms like Ikea and Lego, he argued that strong companies can grow without going public. He also dismissed the idea that IPOs are essential for raising capital or enhancing brand visibility.
Pointing to private market examples like Databricks’ $10 billion raise, Bento said liquidity for employees and shareholders can still be achieved through secondary markets. He confirmed Sword will likely conduct a tender offer next month to support this.
Sword is currently on a $240 million annual revenue run rate. The company’s AI care specialist, Phoenix, is being developed to serve a broader set of conditions, including cardiovascular, gastrointestinal and speech therapy services.
“I want to IPO when I have lots of different proof points at scale in many different care verticals, so maybe 2028,” Bento said.
Bento anticipates raising more capital in 2026 and has hinted at the pattern he intends to maintain.
“Last year, we raised $30 million at $3 billion. This year, it’s $40 million at $4 billion. I think you can imagine what comes next,” he said. “Probably $50 million at $5 billion. I like the numerical symmetry. I think it’s fun.”
I want to IPO when I have lots of different proof points at scale in many different care verticals, so maybe 2028.
