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Hinge IPO Delay, AI Trial & Error, and the Return of Late-Stage Raises
April 10, 2025
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Together with
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“The current dominant M&A thesis is that for larger healthcare players with strong distribution, acquiring startups that can use those distribution channels over and over again is the right play. When executed correctly, combining new technologies with distribution results in immediate ROI.”
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Shaper Capital CEO Travis May
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In a first quarter packed with uncertainty and policy shifts, digital health didn’t skip a beat.
Rock Health’s Q1 Digital Health Market Update counted $3B in venture funding across 122 rounds (up from $2.7B in Q1 2024), and it sounds like there’s finally some optimism in the air again.
Early-stage startups dominated the deal count, with Seed, Series A, and Series B raises comprising 83% of labeled rounds in Q1 (in line with 86% last year).
- Those included some extra-large investments like Achira’s $33M Seed, Open Evidence’s $75M Series A, and Hippocratic AI’s $141M Series B.
The bigger story was the triumphant return of late-stage mega-rounds, headlined by Innovaccer’s $275M Series F and Abridge’s $250M Series D.
- While Q1 only clocked five raises that were Series D or later, this cohort lifted the quarter’s median Series D+ round size to $105M – almost double the $55M median Series D+ size seen in 2024.
Success in this climate requires “leapfrogging.” Rock health devoted a large section of the report to its four strategies for leapfrogging over market shifts using their unique circumstances.
- Tapestry Weaving – using M&A to integrate new features and offerings into your capability mix. Of the 46 M&A deals tracked in Q1, 67% involved digital health startups acquiring other digital health startups, up from 53% across 2024.
- Modular Tech Stacks – designing flexible infrastructure that reduces dependencies and allows for new integrations. Lumeris’ newly introduced Tom AI platform is a perfect example, leveraging capabilities of 60+ LLMs depending on use case.
- Platforms and Channel Partners – building platforms that can plug in channel partners and key experiences. Q1 was brimming with good examples, including Eli Lilly bringing GLP-1 partners onto Lilly Direct and Teladoc expanding its Connected Care Program.
- Engaging Disruptors – embracing solutions that challenge the status quo. Rock Health highlights Labcorp’s participation in Teal Health’s $10M raise, which proactively aligned it with an in-home cervical cancer screening startup that’s disrupting traditional pap tests.
The Takeaway
Following a year of valuation corrections and down-rounds, digital health VCs are showing signs of life, but we’ll have to wait until Rock Health’s next report to see if the momentum can stand up to a trade war.
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- Hinge Considers Delaying IPO: Hinge Health is considering pushing back its IPO plans after a string of bloody weeks in the public markets. Business Insider reported that Hinge is likely going to be pumping the brakes on its original timeline to go public within the next few months. The timing was already raising eyebrows with last month’s S-1 filing – which arrived before the S&P’s tariff-induced nosedive – so it’s definitely understandable that Hinge is thinking of holding off to find better returns for investors and employees.
- Google Cloud Goes Multi-Agent: Google Cloud unveiled a suite of new AI solutions in Vertex AI, as well as two major health system partnerships with Highmark and Hackensack Meridian to tackle inefficiencies using the tools. The first major announcement was an Agent2Agent protocol designed to help enterprises support multi-agent ecosystems, which Google predicts will soon be able to optimize everything from revenue cycles to claims operations. An Agent Garden was also showcased to serve as a centralized hub to find AI agents specialized for various use cases.
- The Fall of Rural Practices: A new report from Avalere and PAI put a spotlight on the steep decline of independent providers in rural areas. From 2019 to 2024, corporate entities nearly doubled ownership of practices in rural areas, while the number of rural physicians employed by health systems also increased by 15%. This shift to corporate ownership helped drive a loss of nearly 2,500 rural physicians (nearly 5% of all physicians practicing in those areas), and prompted over 3,300 rural medical practices to close over the time period.
- Transcarent Completes Accolade Merger: A few short months after announcing the surprise move, Transcarent has officially completed its merger with Accolade. Transcarent now plans to fold Accolade into its existing platform, bringing together the “best of provider, partner, and payor ecosystems.” By integrating Accolade’s WayFinding with Accolade’s expert medical opinions and primary care, the merger is designed to drive higher utilization and lower costs for 20M members and 1,700 employer & health plan clients.
- Hello Heart Pill Box: Hello Heart introduced Hello Heart Pill Box, a smart pill box designed to improve medication adherence through a paired app that sends patients reminders and tracks long term trends for care teams. The company hopes Pill Box will help the ~50% of adults with hypertension who don’t take their medications as prescribed (potentially doubling their risk of heart attack and stroke).
- Suki Adds Prescription Orders: Suki is bringing a major new feature to Suki Assistant: generating and staging prescription orders from visit notes. The new feature has apparently been one of clinicians’ most frequently requested updates, and Suki will now be rolling it out to athenahealth users via the EHR’s marketplace before expanding to additional EHR partners “in the coming weeks.”
- AI Trial and Error: Duke Health CMIO Dr. Eric Poon explained to HealthLeaders why trial and error might not be the worst approach to AI implementation. As crazy as it sounds, Dr. Poon makes the case that any AI strategy is going to involve a ton of costly errors, but they’ll only be mistakes if the system doesn’t learn from them. Duke’s governance strategy has been to “fail often and fail fast,” an especially ambitious approach considering that it’s already using over 80 AI solutions.
- ApolloMD Expands Adonis Partnership: Clinical outsourcing company ApolloMD is expanding its partnership with Adonis to integrate AI Orchestration agents for revenue cycle management. ApolloMD will leverage Adonis’ AI Orchestration capabilities to intelligently deploy agents that automate managing denials, and it’s apparently already seen a success rate of over 90% in AI issue resolution and saved thousands of hours of manual work.
- Teladoc Cardiometabolic Health Program: Teladoc rolled out a new Cardiometabolic Health Program aiming to improve population health and prevent the progression of diabetes, hypertension, and obesity. The new program is designed to support the American Heart Association’s Life Essential 8 (diet, physical activity, nicotine exposure, sleep, weight, blood lipids, blood glucose, blood pressure, stress), supported by at-home testing and seamless integration with Teladoc Health’s 24/7 care, devices, and coaching.
- Definite Guide to AI Resources: Guaranteed Health partnership lead Dr. Raihan Faroqui shared a great Healthcare AI Resource Guide for startups and clinical innovators. The guide lists nearly every AI-focused resource under the sun to help anyone trying to keep up with the quickly evolving space, ranging from academic journals and conferences to thought leaders and Slack communities.
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