Sword Health, a company that provides an artificial-intelligence-first care model, plans to acquire rival Kaia Health for $285 million, the company announced Wednesday.

Kaia, which has headquarters in New York and Munich, is a digital therapeutics company focused on musculoskeletal (MSK) and pulmonary care.

Following the acquisition, Sword will move Kaia’s U.S. members onto its MSK platform, the company said in a press release. Kaia’s millions of American members will gain access to Sword’s expanded AI Care platform.

In Europe, Kaia’s solution is available through Germany’s digital health reimbursement pathway, which covers more than 70 million people in the country. The deal will enable Sword to expand its presence in the German market, building on Kaia’s established foundation within Europe’s largest healthcare system.

This acquisition will accelerate our already rapid growth in the United States while also opening Germany as a major new market, in our mission of democratizing, through AI, access to high-quality care all over the world. We’re excited to work with Kaia’s clients and partners, further expanding our presence in the U.S. market.”

– Virgilio Bento, Founder & CEO of Sword

The companies have complementary strengths, Kaia executives said, with Kaia’s European market presence and strong technology foundations, combined with Sword Health’s advanced AI models, global scale and expanding portfolio across physical, women’s and mental health.

“Joining Sword Health represents a powerful next chapter for the mission we’ve spent over a decade building,” said Adam Pellegrini, CEO of Kaia, in a statement. “We share a common vision: using technology to democratize access to high-quality care . By becoming part of Sword, we can significantly expand our impact for the millions of patients who rely on Kaia today.”

Bento told Bloomberg that the company plans to raise about $500 million in the first quarter to fund expansion and more potential acquisitions. Sword plans to be “very active in acquisitions,” Bento told Bloomberg TV’s “The Opening Trade,” the publication reported.

Sword, which is backed by General Catalyst, Khosla Ventures, Transformation Capital and Founders Fund, says it has raised more than $500 million to date. The company announced a fresh investment of $40 million last summer, boosting its valuation to $4 billion, according to executives.

Sword Health, founded 11 years ago, was initially focused on virtual musculoskeletal care and then expanded into women’s health and mental health.

The company offers digital pain therapy and built-in proprietary AI to deliver customized care to patients from their homes, according to executives. Two years ago, it rolled out its latest tech update, called Phoenix, that combines AI and human clinicians to guide and monitor patient progress in real time.

The company works with more than 1,000 enterprise clients. Sword claims that since 2020, more than 700,000 members across three continents have completed 10 million AI sessions. The company says its virtual care solutions have saved its clients nearly $1 billion in unnecessary healthcare costs.

Sword continues to build out its AI capabilities, and, in July, it rolled out AI care manager agents for payers and providers to tackle operational and administrative tasks. The new AI division, called Sword Intelligence, marked a “pivotal evolution” in Sword’s strategy, according to the company.

“Sword Intelligence allows us to move beyond delivering care to our own members to enabling the entire healthcare industry to scale it efficiently and effectively,” Bento told Fierce Healthcare back in July.

“At Sword Health, we talk about our mission as making world-class care as accessible as running water. And we often say we’re only 5% done. Looking at the opportunity ahead—moving healthcare from a model that relies 100% on human labor to one where AI takes on a central role—that statement has never felt more true,” he added.

As the digital health IPO market begins to warm up, with competitors Hinge Health and Omada Health both successfully going public last year, many industry watchers have Sword on their short list of companies that could go public in 2026.

In November, Bento dismissed the idea of going public in the near term during an interview with Bloomberg. “Right now, running a publicly listed company sounds terribly boring,” he said, according to the publication.

About Sword Health

Sword Health is shifting healthcare to an AI-first model that makes world-class care available anytime, anywhere, at scale, while reducing costs for payers, self-insured employers, national health systems and other healthcare organizations. Starting with physical health and expanding into women’s and mental health, Sword is building the AI to heal the world.

Since 2020, more than 700,000 members across three continents have completed 10 million AI sessions, helping Sword’s 1,000+ enterprise clients avoid over $1 billion in unnecessary healthcare costs. Backed by 43 clinical studies and over 45 patents, Sword Health has raised more than $500 million from leading investors, including Khosla Ventures, General Catalyst, Transformation Capital, and Founders Fund.