Sword Health has agreed to acquire digital health company Kaia Health in a deal valued at $285 million, a move that significantly expands Sword’s presence in both the United States and Europe.

The transaction positions Sword Health as one of the fastest-growing AI-driven care platforms globally, while reshaping competition within the digital musculoskeletal (MSK) care market. Kaia Health specialises in digital MSK and pulmonary care and has built a large user base across multiple markets.

As part of the acquisition, Sword Health plans to migrate Kaia’s millions of US-based members onto its own AI Care platform. The strategy will see Sword retain Kaia’s commercial relationships in the US while replacing Kaia’s technology with its own system, effectively consolidating operations and removing a major competitor from the market.

“This acquisition will accelerate our already rapid growth in the United States while also opening Germany as a major new market,” said Virgilio Bento, Founder & CEO of Sword Health.

The US market remains a central focus for Sword. Kaia Health has spent several years developing partnerships with self-insured employers and enrolling millions of members. Sword will now integrate those partnerships into its existing platform, which the company says has delivered more than 10 million completed AI sessions and achieved $1 billion in cost avoidance for clients.

While the US strategy centres on scale and consolidation, the European element of the deal is driven by access. Kaia Health operates within Germany’s digital health reimbursement framework, known as DiGA, which allows approved digital therapies to be reimbursed by the national health system.

Through this pathway, Kaia’s solution is reimbursable for more than 70 million people in Germany. By acquiring Kaia, Sword gains immediate entry into Europe’s largest healthcare market, avoiding what is often a lengthy and complex regulatory process for non-European digital health companies.

For Sword, which has historically been focused on the US, the deal provides an established presence within a major public healthcare system. The acquisition gives the company what it describes as an existing foundation in Germany, where reimbursement approval is often a key barrier to market entry.

The move also strengthens Sword’s competitive position against other large players in the digital MSK space, including Hinge Health, by increasing its user base and geographic reach.

Sword Health has raised more than $500 million from investors including Khosla Ventures and General Catalyst. The company has built its growth strategy around an “AI-first” care model, positioning automated and scalable interventions as a central part of digital physical therapy.

By acquiring Kaia Health for $285 million, Sword is reinforcing that strategy. The deal signals a continued shift in the sector away from traditional remote care models that rely heavily on video-based interactions, and towards technology-led solutions built around artificial intelligence and automation.

The acquisition is expected to close subject to customary regulatory approvals, with further details on integration timelines yet to be confirmed.