Building the Next Sword Health App: What Canadian Healthcare Startups Need to Know

Did you know Sword Health recently raised $130 million, pushing its valuation to a massive $3 billion?

And what’s even more interesting—it’s not some general health app. 

It’s a virtual physical therapy platform powered by AI and wearable tech. 

Yep, PT sessions without stepping into a clinic.

They’re already working with employers, insurers, and unions—including here in Canada, with a Toronto office up and running. 

And why not? The demand is huge.

Think about it: aging population, more chronic pain, and long wait times for traditional physiotherapy. 

Add in the shift to virtual care post-COVID, and you've got the perfect environment for something like Sword Health to thrive.

Virtual physio isn’t just a cool idea—it actually works. 

Studies show that when guided by a therapist, virtual physiotherapy can offer clinical results similar to in-person care. 

That’s why the global digital MSK care market is expected to cross $26 billion by 2035.

So if you're a Canadian healthcare startup or provider thinking, “Can we build something like this?”—the answer is yes.

But you’ll need a roadmap. From Canada’s privacy laws (like PIPEDA) to Health Canada’s medical device regulations, AI tech choices, and insurance models—there’s a lot to figure out.

Let’s start…

Why Virtual Physical Therapy Matters in Canada

Let’s talk about why virtual physical therapy is becoming a big deal in Canada—and why now’s the right time to build something in this space.

1. The Demand Is Real (And Growing Fast)

The physio market in Canada was worth $4.25 billion in 2022—and it’s expected to hit $6.7 billion by 2030. Why?

Because…

• Older adults are increasing: By 2036, nearly 1 in 4 Canadians will be over 65, and with age comes joint pain, rehab needs, and chronic conditions.
  
• Chronic diseases are rising: More people are dealing with diabetes, obesity, and neurological issues, and many of them need physiotherapy.
  
• Prevention is the new focus: People are more proactive about their health, and rehab therapy is key in both treatment and prevention.

2. It Fixes a Lot of Real-World Problems

Traditional physiotherapy comes with a bunch of barriers.

• Wait times are long. In many areas, people wait weeks or even months. It's a global issue, and yes—it’s a Canadian one too.
  
• Access is unequal. Most physiotherapists work in cities. So, what about rural or remote areas? That’s where virtual care really shines.
  
• It’s just more convenient. For someone recovering from surgery or living far from a clinic, doing therapy at home on a phone or tablet is a game-changer.

3. People Actually Prefer It

Since COVID, virtual care has taken off. Between April 2021 and August 2022, about 60% of Canadians who needed care used virtual services.

And many of them still prefer it—for the convenience, flexibility, and cost savings.

Sure, some still want in-person care. But for many, remote therapy just fits better into their lives.

4. The Tech Makes It Work

AI and digital tools aren’t just buzzwords—they actually make virtual PT smarter and more effective.

• Computer Vision: Apps use just your phone camera to track movement and give real-time feedback (like Exer Physio).
  
• Wearable Sensors: These help with accurate tracking and are used by big players like Sword Health.
  
• AI Algorithms: They analyze your data, adjust your plan, and even give you virtual coaching (Sword’s Phoenix AI is a great example).
  
• Other tools: Video calls, telehealth, and even VR/AR are making recovery more engaging and personalized.

Companies like Sword Health and Hinge Health are already in the Canadian market. But there’s still room for new players who understand local needs.

What Makes Sword Health a Big Deal in Virtual PT?

If you're exploring virtual physical therapy, it's hard to ignore what Sword Health has achieved. 

They're a global leader in digital musculoskeletal (MSK) care — helping people manage pain from home using AI, wearable sensors, and smart devices.

They focus on two main programs:

• Thrive – for MSK pain like back or joint issues
  
• Bloom – for pelvic health, often helping postpartum or menopausal women

What sets them apart?

Their AI care specialist named Phoenix. It talks to patients, tracks their movements during sessions, adjusts exercise plans in real time, and gives feedback — like a real therapist. 

But it’s not fully on autopilot. Human physiotherapists still review everything and make the final call. So it's smart, but not reckless.

Their business model is also different.

They mainly work with employers and health plans. Why? Because MSK problems are expensive, and their virtual PT shows strong results — less pain, fewer surgeries, and happier, more productive people.

Here’s what they’ve reported:

• 67% of users end the program pain-free
  
• Surgery rates drop by 50%
  
• Painkiller use goes down by 47%
  
• Clients save around $2,500–$3,100 per user

Sword Health has also raised $340 million and is now valued at $3 billion. That kind of traction proves the model works — and there's room to grow.

Research Insights Before Building Your Virtual Physiotherapy App (Canadian Context)

If you’re building a virtual physiotherapy app in Canada—especially one that aims to match platforms like Sword Health—here are the key things you need to know:

1. Know Your Users and the Market

Canada has a large and growing demand for physiotherapy.

Older adults (65+), working professionals, people with chronic conditions, and even children all need physio support.

Musculoskeletal (MSK) issues are the biggest driver, but there’s also demand for neuro, cardio-pulmonary, pelvic health, pediatric, and palliative care.

Many patients live in rural areas with limited access to therapists. Others prefer virtual options for convenience.

2. Work With Clinicians – Not Around Them

Therapists must be licensed in the same province as the patient.

Your app should help verify this during appointments. It should also allow therapists to assign exercises, monitor progress, and access patient data easily.

A clinician portal is a must.

Advanced platforms even include AI that makes suggestions—but human therapists still oversee care.

3. Integrate with Canadian Health Systems

Physios often use EMRs to manage schedules, billing, and patient data.

If your app can connect to existing systems (even partially), it’ll be a big plus. 

Smooth clinical workflows—like booking, consultations, and follow-ups—also make adoption easier.

4. Follow Canadian Privacy & Health Rules

You must follow PIPEDA and your province’s health privacy law (like PHIPA in Ontario or HIA in Alberta).

Get clear patient consent, protect health data with encryption, and make sure your app is secure.

If your app uses AI to diagnose or recommend treatment, it might be regulated as a medical device by Health Canada.

5. Use Smart Tech That’s Actually Helpful

AI-powered motion tracking is big in virtual physio.

You can use:

• Computer Vision via the camera (no hardware needed, but lighting matters), or
  
• Wearable sensors for higher accuracy (but they need to be shipped and placed correctly).

Real-time feedback, personalized programs, and patient progress tracking are important features.

Make it easy for therapists and patients to interact—ideally on both mobile and web platforms.

6. Understand How You’ll Make Money

There are different models:

• B2B: Sell to clinics, employers, or insurance companies (like Sword Health does).
  
• B2C: Let patients subscribe directly (you’ll need strong marketing).
  
• B2B2C: License to clinics that serve their own patients.

Most public health plans in Canada don’t fully cover physio for all adults. But private insurance (especially through employers) often does—including virtual sessions.

Make sure registered therapists deliver the care, and consider offering direct billing to insurance companies.

Must-Have Features for Your Virtual Physical Therapy App

A great virtual PT app isn’t just about video calls. It’s about combining care, tech, and usability. Here’s what it should include:

1. Smart Onboarding & Care Plans

Start with an easy onboarding flow. Let AI collect patient details and suggest a custom plan. These plans can adjust as patients improve. Therapists also need tools to edit or update these plans anytime.

2. Real-Time Exercise Monitoring

Use phone cameras or sensors to track how patients move. The app should give instant feedback on form and count reps automatically. It helps prevent injury and improves progress.

3. Therapist Support

Offer secure video sessions and in-app messaging. Patients can get help anytime—either live or later. The therapist stays in control while AI supports the flow.

4. Progress & Outcomes Tracking

Track pain, daily activity, sleep, and more. Sync data from wearables. Let AI tweak treatment plans based on real progress. It keeps recovery personal and precise.

5. Exercise Videos & Reminders

Provide a video library to guide exercises. Add daily exercise alerts and appointment reminders. It keeps patients engaged and on track.

6. Messaging & Chat Tools

Secure messaging is a must—for both patients and your care team. It makes follow-ups smooth and safe.

7. Admin Dashboard for Therapists

Give clinicians an easy-to-use dashboard. They should be able to schedule, monitor patients, manage tasks, and see reports—all in one place.

These features help create a modern, helpful, and effective PT experience—for both patients and therapists.

Common Challenges (And How We Solve Them)

Building a virtual physical therapy app isn’t just about tech—it’s about solving real-world problems for patients and therapists. Especially in Canada, where privacy laws and care standards vary by province, there are a few hurdles to keep in mind. Here’s what we’ve learned, and how we tackle each challenge head-on:

1. Getting Patients to Stick with Their Care Plan

The challenge: It’s tough to keep patients motivated when they’re doing exercises alone at home. They miss the connection they get during in-person sessions.

How we solve it:

• We use AI and sensors to give real-time feedback, so patients know they’re doing exercises correctly.
  
• Exercise plans adapt based on progress, and users can track their improvements over time.
  
• We add reminders, video guides, and even gamified features to keep things engaging.
  
• A secure chat lets patients talk to their therapist anytime.
  
• And the app is super easy to use—even for less tech-savvy patients.

2. Tracking Movements Accurately

The challenge: Therapists can’t physically assess patients, so movement tracking must be spot on.

How we solve it:

• We pick the best tech based on use case—wearable sensors or computer vision (or both).
  
• We build smart algorithms and validate them against in-person assessments.
  
• For sensors, we guide users on correct placement. For cameras, we give setup tips.
  
• Plus, therapists always review the data to make sure everything makes sense.

3. Earning Therapists’ Trust

The challenge: Many physiotherapists are cautious about going fully virtual. They worry about quality, ethics, and losing their clinical control.

How we solve it:

• We back everything with clinical evidence, ideally from within Canada.
  
• Therapists stay in charge—our tech just helps them personalize care faster.
  
• We align with Canadian physiotherapy standards and workflows.
  
• We also offer training, support, and even co-design features with therapists.

4. Protecting Patient Privacy

The challenge: In Canada, you’ve got PIPEDA, PHIPA, HIA, PIPA… each province has different rules.

How we solve it:

• We design the app to meet both federal and provincial privacy laws.
  
• Data is encrypted at all times—during transfer and storage.
  
• Patients give clear, informed consent before using the platform.
  
• We work with legal experts to stay fully compliant.
  
• And we keep data stored securely, right here in Canada when needed.

5. Fitting into Clinic Workflows

The challenge: If the app doesn’t sync with a clinic’s system, it just adds more work.

How we solve it:

• We build admin tools right into the app—scheduling, patient records, progress tracking, and more.
  
• We support EHR and EMR integration using standard APIs.
  
• Therapists get templates to speed up documentation.
  
• We even help with billing and insurance reporting.
  
• And team members can chat securely within the app.

By solving these challenges early, we help healthcare providers build a virtual PT app that’s smart, safe, and ready for real-world use in Canada.