Sword Health, a digital physical therapy company founded in Porto and now based in New York, acquired Kaia Health, a digital therapeutics company for musculoskeletal (MSK) and pulmonary conditions with offices in Munich and New York. Kaia announced the deal on January 28, 2026.
Sword founder and chief executive Virgílio Bento put the price at $285 million (about €237 million) in a Bloomberg TV interview, according to ECO News. The companies did not say whether the deal was paid in cash, shares or a mix. ECO News reported that it is Sword's largest acquisition to date.
Sword will replace Kaia's MSK product in the United States and move Kaia's US members onto its own AI Care platform. In Europe, Kaia's business in Germany will become the base for Sword's expansion into national health systems.
What Kaia built
Kaia offers app-based exercise therapy for back pain and other MSK conditions, as well as a program for pulmonary disease. Its MSK program uses AI-based motion tracking to give patients real-time feedback on how they perform exercises. The company sells to employers, health insurers and public health systems.
In the United States, Kaia said it has given millions of members access to digital MSK care. In Germany, its therapy is covered through the country's reimbursement pathway for digital health apps, which reaches more than 70 million people. Kaia lists CE medical device marking and ISO 13485 certification among its credentials.
“Joining Sword Health represents a powerful next chapter for the mission we've spent over a decade building.”
Why Sword is buying
Bento said the deal would speed up Sword's growth in the United States and open Germany as a major new market. Sword says more than 700,000 members across three continents have completed over 10 million AI sessions on its platform since 2020, and that it works with more than 1,000 enterprise clients.
Kaia brings its European market presence and technology, while Sword contributes its AI models, scale and a wider range of programs, according to the announcement. Kaia's US members will keep receiving care during the move to Sword's platform, the companies said.
The acquisition is also the start of a buying spree. Bento told ECO News that Sword would be very active in acquisitions in 2026 and that Kaia was the first. He said the company expected to announce a few more deals in the first half of the year and planned to raise about $500 million in the first quarter to fund acquisitions and expansion. Sword was valued at $4 billion in its last funding round in 2025 and reported positive cash flow that year.
Kaia chief executive Adam Pellegrini said the companies shared a vision of using technology to widen access to high-quality care.
The founders and the funding
Kaia's founder, Konstantin Mehl, was its president and chief executive when it raised its Series C in 2021; Adam Pellegrini led the company at the time of the sale. The company raised a $26 million Series B in June 2020, led by 3VC, Idinvest Partners and Optum Ventures, and a $75 million Series C in April 2021, led by an unnamed growth equity fund. Those rounds brought its total funding to about $125 million.
Other backers included Balderton Capital, which first invested at the Series A in 2019, as well as Eurazeo, Heartcore Capital, Symphony Ventures and A-Round Capital. Hogan Lovells acted as lead legal counsel to Kaia on the sale. Sword has raised more than $500 million from investors including Khosla Ventures, General Catalyst, Transformation Capital and Founders Fund.
Consolidation in digital MSK care
Sword, Kaia and Hinge Health have all competed for contracts with US employers and insurers to provide digital MSK therapy. Buying Kaia removes a rival in the United States and gives Sword a product that is already reimbursed in Germany, where Bento said the digital health pathway covers more than 70 million people.
The main risk is execution. An analysis published by Madri+d using Dealroom data noted that Sword must keep care uninterrupted for Kaia members and make the two platforms work together while it retires Kaia's US product.
Sword has also been moving beyond physical therapy. Its platform now covers women's health and mental health, and ECO News reported that it recently signed an agreement to manage technology for the Greek healthcare system. Bento ruled out a stock market listing for now, according to the same report.
