Technology

From ‘Cockroach Award’ to the Big Board: Hinge Health’s unlikely path to IPO

Published

1 month ago

May 5, 2025

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Hinge Health co-founders Gabriel Mecklenburg (left) and Daniel Perez (right).

Courtesy of Hinge Health

At digital physical therapy startup Hinge Health, CEO Daniel Perez used to recognize hard-working employees with the “Cockroach Award,” a distinction that brought with it a “cockroach squad” t-shirt and a cash payout.

References to the insect were abundant at the company’s old headquarters in London, where a picture of a cockroach was prominently displayed on the wall. For much of Hinge’s 10-year history, the cockroach was the unofficial mascot. Staffers named it Flossy after the viral dance move “the floss.”

Perez relishes the symbolism. In his determination to build a company that will push through adversity, he’s encouraged employees to think of themselves like cockroaches, due to the creature’s grimy resilience and noted ability to survive harsh conditions.

“It was the identity of every individual in the company,” said Joshua Sturm, a vice president at Hinge from 2019 to 2024 and now chief revenue officer at cancer prevention startup Color Health. “We are all in this together, and no matter what happens, we are going to survive together.”

Perez and his 1,400-person workforce now face the ultimate test of their mettle. Hinge, which moved from London to San Francisco in 2017, is trying to go public at a time of such extreme economic uncertainty and market volatility that several companies, including online lender Klarna and ticket marketplace StubHub, have delayed their long-awaited IPOs.

Hinge filed its prospectus on March 10, announcing plans to trade on the New York Stock Exchange under the ticker symbol “HNGE.” Three weeks later, President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil after tariff concerns had already pushed the Nasdaq to its worst quarter since 2022.

But Hinge. led by its 39-year old co-founder and CEO, appears determined to power through the chaos. Hinge declined to comment or make Perez available for an interview.

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Going public was already going to be a risky endeavor for Hinge. The IPO market has been mostly dormant since late 2021, when soaring inflation and rising interest rates pushed investors out of risky assets. Within digital health, it’s been almost completely dead.

Health-tech companies have struggled to adapt to a more muted growth environment following the Covid pandemic, and many once promising business models haven’t panned out as planned.

The starkest example is virtual health company Teladoc, which has a market cap of just over $1 billion less than five years after buying digital health provider Livongo in a deal that valued the combined companies at $37 billion. Teladoc’s BetterHelp mental health unit has been a particularly troublesome business as paying users dropped off in the years following the pandemic.

Over time, Hinge’s Cockroach Award transitioned from a monthly prize to a quarterly distinction. The company phased it out entirely about a year ago in preparation for its next public-facing chapter, but the survive-at-all-costs mentality persists, according to current employees. Now, staffers are recognized with the “Movers Awards,” a nod to the company’s focus on movement.

“We have many decades of work ahead,” Perez wrote in a letter to investors in March. “We hope you join us on this journey.”

CNBC spoke to 13 current and former Hinge employees, investors, and people close to Perez for this story, some of whom asked not to be named in order to provide candid commentary.

‘I gave him terrible advice’

Hinge uses software to help patients treat acute musculoskeletal injuries, chronic pain and carry out post-surgery rehabilitation remotely. Large employers like Target and Morgan Stanley cover the costs so their employees can access Hinge’s app-based virtual physical therapy, as well as its wearable electrical nerve stimulation device called Enso.

The company says its technology can help users manage pain, cut down health-care costs and reduce the need for surgery and opioids. Revenue increased 33% to $390.4 million last year, while its net loss narrowed to $11.9 million from $108.1 million a year earlier, according to the prospectus.

Hinge’s roster of clients expanded by 36% last year to 2,256, and the number of individual members jumped 44% to over 532,300, the filing said.

Hinge has raised more than $1 billion from investors including Tiger Global Management and Coatue Management, and it boasted a $6.2 billion valuation as of October 2021, the last time the company raised outside funding. The biggest institutional shareholders are venture firms Insight Partners and Atomico, which own 19% and 15% of the stock, respectively, according to the filing.

Daniel Perez, CEO of Hinge Health

Courtesy: Hinge Health

Perez and Gabriel Mecklenburg, Hinge’s executive chairman, started the company in 2014. The pair met while they were both pursuing PhDs in the U.K. — Perez at the University of Oxford and Mecklenburg at Imperial College London. They were distracted students, according to Perez’s twin brother, David.

By the time they launched Hinge, Perez and Mecklenburg had already co-founded two other ventures together. One was the Oxbridge Biotech Roundtable, an organization that connected academics and industry experts. The other was Marblar, which worked to commercialize academic intellectual property.

Perez took a leave of absence from Oxford while working on Marblar and never returned. His brother wasn’t a fan of the decision initially.

“I gave him terrible advice,” said David Perez, a graduate of Yale Law School and partner at Perkins Coie in Seattle. “I was like, ‘I think you’re an idiot, I think you should focus on your PhD. Only an idiot would not finish a PhD at Oxford.'”

The twins have two older siblings. Their mother immigrated from Cuba in 1968, followed 12 years later by their father. Their parents met in Miami, got married after just three dates, and are still together after more than 40 years.

The family moved from Miami to Salt Lake City, Utah, in 1990. Perez’s mother was a substitute teacher and his father worked at restaurants as a dishwasher and busboy. David Perez said their father “worked around the clock” and used to call out orders in his sleep.

“It wasn’t a lot of money, I think combined they made about $19,000 a year,” David Perez said. “But they stitched it together and raised four kids.”

The twin boys were competitive, particularly when it came to academics and playing basketball in the driveway. David said his brother got “great grades” and always had an inclination toward science and medicine, graduating from high school at age 16 and then starting college at Westminster University, a small liberal arts school in Utah.

“I swear,” David Perez said, “there were times where the only punishment that my mom could issue that would have the sting was restricting our ability to do homework.”

Hit by a car

Perez was a student in the Honors College at Westminster, and he graduated with a degree in biology. Richard Badenhausen, dean of the Honors College, described Perez as an independent thinker and an ambitious student, especially for his age.

“He didn’t care too much what people thought about him, which is a strength in my book,” Badenhausen said in an interview.

When Perez was 13, he was hit by a car. He broke an arm and a leg, and had to be airlifted to a nearby hospital. After three surgeries and 12 months of rehab, he had a newfound interest in orthopedics and physical therapy.

Mecklenburg had a serious injury of his own, tearing his anterior cruciate ligament (ACL) during a judo match, which also required a year of rehab, according to Hinge’s website.

One day in October 2014, the pair put their heads together and outlined the tools they wished were available while undergoing physical therapy. Musculoskeletal conditions affect as many as 1.7 billion people worldwide, according to Hinge’s prospectus, so there was no shortage of opportunities.

They had the early concept of Hinge within hours and a prototype ready by December of that year.

In Hinge’s early days, Perez and Mecklenburg would meet every Saturday morning to talk shop. Now, as they’ve aged and started families, they meet on Wednesday nights, according to colleagues. Perez welcomed his first child with his wife late last year.

“Seeing the growth over the last six, seven, eight years has just been unbelievable,” said Jon Reynolds, a tech founder who contributed to Hinge’s seed funding round. “That comes down to the quality of Dan and Gabriel as leaders. They complement each other really well, and they’ve obviously got that mutual respect.”

Perez is a hands-on CEO who expects a lot from his staff.

He’s direct, detail-oriented, opinionated, competitive and can be intense, according to current and former employees. But he’s committed to the mission and the wellbeing of his employees, they said.

“He’s one of those rare founder CEOs who I think can go all the way,” said Paul Kruszewski, a former Hinge employee who joined the company after it acquired his Canadian computer vision startup, Wrnch, in 2021.

Hinge Health’s Enso product.

Courtesy: Hinge Health

Employees say Perez is a voracious reader, often finishing two to four books a month. That includes books about business and leadership, an important source of information given that Hinge was his first real job. He’s a fan of “The Innovator’s Prescription,” by Clayton Christensen and others, “Crossing the Chasm,” by Geoffrey Moore and “The Long Fix,” by Dr. Vivian Lee.

He also likes his staffers to read. Executives will often prepare to discuss chapters from a book in their meetings.

“I’d come home and there’d be a package from Dan, and it’s a book,” said Sturm, who led partnerships and new market development at Hinge. “That was just the norm.”

Sturm, who has worked in the health-care and benefits space for around 30 years, said Hinge was very deliberate with hiring, so there wasn’t a lot of turnover among senior executives. He said Hinge’s recruitment process was the hardest he’s ever experienced.

Another “Dan-ism,” as Sturm called it, is Hinge’s philosophy around writing. Perez has employees write memos, typically up to six pages long, instead of preparing slide decks or other materials ahead of meetings. Perez was inspired by a similar practice at Amazon, according to current and former employees, and sees it as a way to force employees to think through what they want to say instead of hiding behind bullet points.

Hinge’s memo culture can be an adjustment, particularly for new employees. Sturm said he thought the practice was “insane” at first, but ultimately came to appreciate it and said it improved his pitches.

“When you sort of sit back, you go, ‘You know actually, he wasn’t wrong,'” Sturm said.

Hinge has come a long way since venture firm Atomico led the $8 million Series A investment in 2017. The London-based firm said in a blog post at the time that it was “extremely impressed by Daniel and Gabriel, and their determination to tackle a big problem in society.”

Carolina Brochado led the round, though she left Atomico a year later and now works at investment firm EQT Group. She said that getting Hinge to the brink of an IPO was a “one in a million chance,” but noted that the company has managed to build a sizable business in digital health despite having so many odds stacked against it.

“Lots of learnings along the way, of course, like a big tech correction in the middle,” Brochado said in an interview. “But it really is one of those rare examples of just an enormous market that was under penetrated.”

For David Perez, whose firm now serves as Hinge’s outside counsel, watching the startup grow has been “fascinating,” he said.

“I’m a partner at a major law firm,” he said, “and I am only the second most successful twin. But I think I’m okay with that.”

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Technology

DocuSign stock tanks 18% after company cuts billings outlook

Published

2 hours ago

June 6, 2025

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DocuSign stock tanks 18% after company cuts billings outlook

The Docusign Inc. application for download in the Apple App Store on a smartphone arranged in Dobbs Ferry, New York, U.S., on Thursday, April 1, 2021.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Shares of DocuSign tanked 18% in trading on Friday, a day after the e-signature provider reported stronger-than-expected earnings but slashed its full-year billings outlook.

Here’s how the company performed in the fiscal first quarter, compared with estimates from analysts polled by LSEG:

Earnings per share: 90 cents, adjusted, vs. 81 cents expected
Revenue: $764 million vs. $748 million expected

Billings, a closely-watched sales metric, came in at $739.6 million in the fiscal first quarter, which ended April 30. That was lower than the $746 million expected by analysts, according to StreetAccount. It also fell short of the company’s own forecast, which guided for billings between $741 million and $751 million.

For the current fiscal year, DocuSign said it expects billings of $3.28 billion to $3.34 billion, down from a range of $3.3 billion to $3.35 billion.

Britain wants to lift a ban on a key crypto product — and catch up to the U.S.

Published

4 hours ago

June 6, 2025

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Britain wants to lift a ban on a key crypto product — and catch up to the U.S.

Benoit Tessier | Reuters

LONDON — The U.K. is set to lift a ban on a key type of crypto debt security in a bid to catch up to the U.S. and other financial hubs as it looks to become a global hub for digital assets.

On Friday, the Financial Conduct Authority, the U.K.’s main regulator for financial services, announced a proposal to reverse its ban on offering crypto exchange-traded notes to retail investors.

Exchange-traded notes are a type of debt instrument that are linked to one or more specified assets — cryptocurrencies, in this case. In essence, they allow investors to gain exposure to digital tokens through the use of a regulated exchange.

Sales of crypto ETNs to retail investors have been prohibited in the U.K. since the FCA put in place a ban in 2019 due to concerns over the potential harms they pose to consumers.

On Friday, however, the FCA said it proposed lifting the ban on crypto ETNs “to support UK growth and competitiveness.” A restriction on crypto derivatives will remain in place, the watchdog added.

“This consultation demonstrates our commitment to supporting the growth and competitiveness of the UK’s crypto industry,” David Geale, executive director of payments and digital assets at the FCA, said in a statement.

“We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them, given they could lose all their money.”

‘Major milestone’

The development was swiftly praised by crypto firms as a significant moment for the industry in the U.K. Britain is often perceived as falling behind the U.S., European Union and other global players when it comes to digital assets.

Spot crypto exchange-traded funds have been available in the U.S. since the Securities and Exchange Commission approved rule changes to allow the creation of the first bitcoin-linked ETFs early last year.

In April, the U.K. government published draft legislation for the crypto sector with the goal of making the country a “world leader in digital assets.” The FCA is separately working through a detailed roadmap of consultations and discussion papers with a view to implement a regulatory regime for crypto by 2026.

“Until now, the UK has been an outlier on ETNs. We hope this move will improve consumer protections and we will continue to make the case for lifting the ban on retail investors from accessing highly-regulated derivative products,” said Ian Taylor, board advisor to crypto trade body CryptoUK.

Kraken’s U.K. General Manager Bivu Das said that the proposal to approve sales of crypto ETNs to consumers marked a “major milestone for the UK’s crypto ecosystem.”

The FCA is “acknowledging that the market has matured significantly and that outdated restrictions no longer serve their intended purpose,” Das added. “Regulatory moves like this are critical if the UK is to stay competitive in the race to lead in digital assets.”

Technology

At WWDC, Apple’s AI strategy comes into question

Published

6 hours ago

June 6, 2025

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At WWDC, Apple's AI strategy comes into question

Why Apple’s Siri is not better in the age of AI

One year ago, Apple announced Apple Intelligence, its response to the wave of sophisticated chatbots and systems kicked off by the arrival of ChatGPT and the age of generative AI.

Analysts said Apple’s installed base of more than 1 billion iPhones, the data on its device and its custom-designed silicon chips were advantages that would help the company become an AI leader.

But it’s been an underwhelming 12 months since then.

Apple Intelligence stumbled out of the gate while rivals like OpenAI, Google and Meta have continued to make headway launching new generative-AI models.

Now, investors are calling for Apple to do something major to catch up in AI, which is rapidly transforming the tech industry.

When CEO Tim Cook speaks at Apple’s annual Worldwide Developers Conference in Cupertino, California, investors on Monday, fans and developers will want to hear how the company’s approach to AI has changed. That’s especially important after some Apple executives have said that the technology could be the reason the iPhone gets supplanted by the next-generation of computer hardware.

“You may not need an iPhone 10 years from now,” Apple services chief Eddy Cue said in court last month in one of the government’s antitrust case against Google, adding that AI was a “huge technological shift” that can upend incumbents like Apple.

The Apple Intelligence rollout was rocky. The first features launched in October — tools for rewriting text, a new Siri animation and improved voice, and a tool that generates slideshow movies out of user photos — were underwhelming. One key feature, which came out in December, summarized long stacks of text messages. But it was disabled for news and media apps after the BBC discovered that it twisted headlines to display factually incorrect information.

But the biggest stumble for Apple came in early March, when the company said that it was delaying “More personal Siri,” a major improvement to the Siri voice assistant that would integrate it with iPhone apps so it could do things like find details from inside emails and make restaurant reservations.

Apple had been advertising the feature on television as a key reason to buy an iPhone 16, but after delaying the feature until the “coming year,” it pulled the ads from broadcast and YouTube. The company now faces class-action suits from people who claim they were misled into buying a new iPhone.

Tim Cook, chief executive officer of Apple Inc., during the 60th presidential inauguration in the rotunda of the US Capitol in Washington, DC, US, on Monday, Jan. 20, 2025.

Bloomberg | Getty Images

Although Apple Intelligence had a rough first year, the company hasn’t said much publicly. However, it’s reportedly reorganized some of its AI teams.

JPMorgan Chase analyst Samik Chatterjee said in a note this week that investor expectations were set for a “lackluster” WWDC, as the company still needs to bring to market the features it announced last year, versus “addressing the more material issue of lagging behind other large technology companies in relation to advancements in AI.”

Meanwhile, Apple is facing renewed competition in its core business.

OpenAI in May acquired the startup io for about $6.4 billion, bringing in former Apple chief designer Jony Ive to build AI hardware. The company hasn’t provided details about its future devices.

Meta has made a splash with its Ray-Ban Meta Glasses, selling over 2 million units since launching in 2021. The devices use Meta’s Llama large language model to answer spoken questions from the user.

And last month, Android maker Google said its Gemini models will become the default assistant on Android phones. The company showed Gemini doing things that go beyond Siri’s capabilities, such as summarizing videos. Google also announced a $150 million partnership with Warby Parker to develop its own pair of AI-powered smart glasses.

A working Apple Intelligence is important for the company to encourage its users to buy new iPhones since devices released before the iPhone 15 Pro in 2023 don’t support the suite of features. But AI hasn’t been a key driver of sales for smartphones yet, and may not be for years, said Forrester analyst Thomas Husson.

“There’s been some new cool features and services, but I don’t think it has drastically changed the experience yet,” Husson said.

Apple declined to comment.

Apple needs to do something big

For years, Apple didn’t like the words “artificial intelligence.” It preferred the more academic term “machine learning.”

Apple focused its efforts on what could efficiently run on its battery-powered phones. The AI race, led by OpenAI and Google, was about bleeding-edge capabilities that required high-powered servers based on Nvidia graphics-processing units, or GPUs.

Then ChatGPT launched in late 2022, making AI the most important term in Silicon Valley. Soon after, Cook was telling investors that Apple was spending “a tremendous amount of time and effort” on the technology.

While Apple Intelligence is based on a series of language and diffusion models that the company trained itself, Apple hasn’t publicly competed with Google, OpenAI, Anthropic, or other companies in what are called “frontier models,” or the most capable AI systems that often have to be trained on large server clusters packed with Nvidia chips and fast memory.

The difference between the way Apple and its rivals approach AI can be seen in the company’s approach to capital expenditures. Apple spent $9.5 billion on capital expenditures in its fiscal 2024, or about 2.4% of its total revenue.

The iPhone maker has rented the computing power needed to train its foundation models, it revealed last year, from Google Cloud and other providers. Apple’s rivals are gobbling up billions of dollars of GPUs to push the technology forward.

Meanwhile, Meta, Amazon, Alphabet and Microsoft are planning to collectively spend more than $300 billion this year on capital expenditures, up from $230 billion last year. Amazon alone is aiming to spend $100 billion, and Microsoft has allocated $80 billion.

Apple’s best chance to quickly catch up up may be to do what it’s done many times in the past: Buy a company, and turn it into a killer feature.

It bought PA Semi in 2008 for $278 million, and turned it into the seed for its semiconductor division. Ahead of releasing the Vision Pro headset, Apple bought over 10 startups that worked on virtual and augmented reality. Even Siri was a startup before Apple bought it for more than $200 million in 2010.

With $133 billion in cash and marketable securities on hand as of the start of May, there isn’t much Apple can’t buy, assuming it could get regulatory clearance. However, OpenAI, Apple’s current Siri partner, is likely out of reach with a valuation of $300 billion. And given OpenAI’s new relationship with Ive to build hardware, there are reasons for Apple to slow the partnership down.

Apple’s senior vice president of Services, Eddy Cue participates in a featured session: “Severance’s” Ben Stiller: Moving Culture Through Innovation and Creativity” during the SXSW 2025 Conference and Festivals at the Austin Convention Center in Austin, Texas on March 9, 2025.

Suzanne Cordeiro | AFP | Getty Images

Anthropic, whose Claude chatbot is powered by one of the leading AI models, was valued at $61.5 billion in a funding round in March. In the Google antitrust case, Cue, a senior vice president at Apple, mentioned Anthropic as a potential replacement for Google as the default search option in the iPhone’s Safari browser.

“They probably need to acquire Anthropic,” said Deepwater Asset Management’s Gene Munster, who has followed Apple for decades, in an interview.

That would be by far Apple’s largest acquisition. To date, the most the company has paid is $3 billion, when it bought Beats Electronics in 2014 for $3 billion, part of an effort to catch Spotify in the music streaming market.

Apple could buy a company that’s developing AI-based apps, even if they’re on open-source or other company models. Perplexity, which is currently fundraising at a $14 billion valuation, has shown strong interest in the smartphone market and understanding of the value of being a default AI service.

In April, Perplexity announced a partnership with Motorola, and it’s reportedly in talks with Samsung to integrate its technology into the South Korean company’s version of Android, as well as take investment from the Apple rival. Cue mentioned that Apple had been in discussions with Perplexity about its technology at the May trial.

It’s also possible for Apple to treat frontier AI like it treated search — as a service that can be filled with a partnership. Apple software chief Craig Federighi implied as much last year at a panel discussion during WWDC, saying that Apple would like to add other AI models, especially for specific purposes, into its Apple Intelligence framework.

Federighi specifically mentioned Google, whose Gemini can now fluidly speak to the user and handle input that comes from photos, videos, voice or text. Documents revealed during the Google trial showed executives from Apple, including Cue and M&A chief Adrian Perica, were involved in the negotiations over Gemini.

Each chip in the M1 family — M1, M1 Pro, M1 Max, and now M1 Ultra.

Courtesy: Apple

Apple’s AI advantages

Apple has been designing its own chips since 2010, and with AI in mind since at least 2018.

The most powerful Apple M-series chips can tap into something called “unified memory,” says WebAI co-founder David Stout, making them ideal for doing AI inference. Apple also includes good GPUs on its chips, he said. WebAI is building software that allows users to fine-tune, train and run big models on consumer hardware.

Stout’s company has built clusters of consumer-grade Mac Studio computers to run big AI models, like Meta’s Llama.

“We picked Apple Silicon because we think it’s the best hardware for AI,” said Stout, adding that in his company’s tests, Apple’s chips can output 100 million tokens per dollar spent versus 12 million tokens per dollar for an Nvidia H100.

Part of Apple’s strategy for Siri, announced last summer, was to cajole its developers to build snippets of new code into their apps, which would make it simpler for Apple Intelligence and Siri to use the apps and get things done.

While Apple is still pushing “App Intents” — the same system powers stuff like lock screen widgets — the framework for how they work with Siri hasn’t been released yet.

Jony Ive attends The Metropolitan Museum of Art’s Costume Institute benefit gala celebrating the opening of the “Superfine: Tailoring Black Style” exhibition on Monday, May 5, 2025, in New York.

Evan Agostini | Invision | AP

‘You may not need an iPhone’

The threat that advanced AI like Google Gemini and OpenAI’s ChatGPT represents to Apple was underscored by Cue at the trial last month. He suggested that the rise of AI threatened Apple’s biggest business.

“AI is a new technology shift, and it’s creating new opportunities for new entrants,” Cue said at the trial last month.

There is a growing sense in Silicon Valley that sophisticated AI interfaces might one day replace smartphones and laptops with new devices that are designed from the ground up to take advantage of AI-based interfaces. That could mean people speaking or chatting with their devices to command AI agents, rather than tapping on touch screens or keyboards.

Upon joining OpenAI in May, Ive said he believes AI is enabling a new generation of hardware.

“I am absolutely certain that we are literally on the brink of a new generation of technology that can make us our better selves,” Ive, the iPhone designer who retired from Apple in 2019, said in a video announcing that his company had been acquired.

Though AI represents a risk to Apple’s current business, Deepwater Asset Management’s Munster said the company has more time than many believe to adapt because of so many years of customer loyalty.

“This is still something that has existential risk to all these companies, including Apple, but I don’t think we’re at some break point in the next year around it,” Munster said.