Sword Health Acquires Kaia Health and Plans New $500 Million Funding Round
AI-powered health technology company Sword Health has acquired its competitor Kaia Health for $285 million. The company also plans to launch a new funding round of approximately $500 million for expansion and new acquisitions.
Major AI Merger in the Healthcare Sector
Sword Health, a provider of AI-focused digital health solutions, has reached an agreement to acquire its significant competitor Kaia Health. Valued at $285 million, this deal marks the company's largest acquisition to date. The agreement strengthens Sword Health's presence in the United States while also enabling its entry into the German market.
Expansion Strategy and New Funding Target
In a statement to Bloomberg TV, Sword Health's Founder and CEO Virgílio Bento stated that they have planned 2026 to be an active year for acquisitions and that the Kaia Health deal is the first step. Bento expressed that they expect to announce several more acquisition deals in the first half of the year.
The company also aims to complete a new funding round of approximately $500 million in the first quarter of 2026 to finance expansion and potential new acquisitions. This figure is close to the total amount of funding the company has raised to date. Bento emphasized that there is accumulated interest in the market for a new funding round and that despite rapid growth in 2025, their cash flows have been positive.
About the Companies and Technologies
Porto-based Sword Health aims to predict, prevent, and treat pain using artificial intelligence. The company provides remote physical therapy services, allowing clinicians to focus on the most complex cases. Its services include digital physical therapy, women's pelvic health, injury prevention, surgery avoidance, and physical health education.
Kaia Health is a digital therapeutics company based in New York and Munich. The company offers digital treatment programs for chronic pain and lung diseases. Kaia Health had raised approximately $125 million in multiple funding rounds by 2021.
Artificial intelligence is finding increasingly more applications in the healthcare sector. For instance, content like the Guide to Creating AI Images with ChatGPT demonstrates AI's impact in creative fields, while its integration in healthcare deepens. Other tech giants are similarly introducing AI-focused updates; the news Google Gemini May Introduce a 'Short Break' Reminder for Long Usage serves as an example of user-experience-focused approaches.
Market and Future Plans
Sword Health, which reached a valuation of $4 billion in a 2025 funding round, is backed by investors such as Khosla Ventures, General Catalyst, and Founders Fund. The company signed an agreement with the Greek Ministry of Health in November 2025 for the use of artificial intelligence in the country's national health system.
In a statement last year, CEO Virgílio Bento noted that an initial public offering (IPO) was not on the agenda in the near term and described the idea of managing a public company as a 'boring' possibility. The company's current focus is concentrated on its strategy of growth through acquisition and increasing market share.
