Chicago, Illinois-based Augmedics, an innovator in augmented reality surgical image guidance has completed an oversubscribed Series C funding round, raising $36 million.
Investors From Israel and the U.S.
This investing round included investors from both Israel and the U.S., led by H.I.G. Capital, Revival Healthcare Capital, and Almeda Ventures.
Based in Miami, Florida, H.I.G. Capital is a private equity and alternative assets investment firm. Focusing on the medical device and diagnostic sectors of healthcare, Revival Healthcare Capital is an Austin, Texas-based private equity firm. Headquartered in Israel and founded in 2020, Almeda Ventures globally invests in medical devices, digital health, and bio-convergence.
This funding round also included two strategic investors, HCA Healthcare Health Insight Capital and existing investor XR Invest (previously called AO Invest).
Augmedics CEO and Founder Nissan Elimelech commented, “We are very pleased to have completed this large financing round led by H.I.G. Capital, Revival Healthcare Capital, and Almeda Ventures, which will enable us to promote and expand our operations and meet the strong demand we are experiencing for our technology in the U.S. following our commercial launch last year.”
The Augmedics board of directors is also expanding with this investing round. Bruce Robertson, managing director of H.I.G. BioHealth Partners, will join the Augmedics board, bringing his 30 years of life sciences experience. Also joining the board is Rick Anderson, Revival Healthcare Capital chairman and managing director. Anderson has more than 30 years of leadership experience in the medical device industry. Amir Blatt, Almeda Ventures founding partner and chief information officer, will join as a board observer.
Series B Comes Before Series C
Eight months ago, amid the COVID-19 pandemic, Augmedics completed its Series B funding round, raising $21 million. This round of financing brings its funding total to $63 million.
How did Augmedics get from A to Series B? With a lot of help from its employees.
Last year Augmedics was preparing for its commercial launch and was in the process of closing a Series B financing round. Then the COVID-19 pandemic struck. After losing the support of venture capital firms, Augmedics’ U.S. employees and their families stepped up to the plate and invested $4 million in Augmedics. Thanks to their efforts, Augmedics was able to complete a $15 million Series B funding round.
For OTW’s coverage of Augmedics’ Series B funding round, see “Employees Save Spine Company Amid COVID-19 Pandemic.”
From Series B to the xvision Spine System
In December 2019, Augmedics received U.S. Food and Drug Administration (FDA) 510(k) clearance for its xvsion Spine System.
The FDA-cleared xvision Spine System is the “first augmented reality (AR) navigation system to be used in surgery.” It gives surgeons the ability to “visualize their patients’ 3D spinal anatomy during surgery as if they had ‘x-ray vision,’ helping them to accurately navigate instruments and implants while looking directly at the patient, rather than a remote screen.”
How is augmented reality different from virtual reality (VR)? In virtual reality, users interact in a completely artificial space. In augmented reality, virtual or artificial elements are overlaid in the real world using cameras and displays or headsets.
Augmedics President and Chief Commercial Officer Tim Murawski explained to OTW, “xvision is a self-contained navigation system in a headset, so it presents a small footprint in the OR [operating room]. It requires minimal set up time, workflow remains constant, and the surgeon’s eyes stay aligned with his or her instruments and the patient on the table. It’s always about delivering the best care to the patient, and xvision helps surgeons accomplish this goal.”
How can surgeons keep their eyes on the patient while also viewing the navigation data? The xvision Spine System projects the navigation data onto the surgeon’s retina using the headset.
The xvision Spine System “consists of a transparent near-eye-display headset and all elements of a traditional navigation system.” The system determines “the position of surgical tools, in real-time, and superimposes them on the patient’s CT [computed tomography] data.”
In the press release, Anderson commented, “Augmented reality is at the leading edge of medical technology innovation in navigation and digital surgery. The majority of spine and orthopedic procedures performed today are done without navigation and we have the opportunity to significantly improve outcomes for patients and physicians alike.”
Anderson continued, “The xvision Spine System may enable surgeons to be better, faster and more accurate, providing a significant runway for expansion in the currently approved indication and beyond. We are excited to partner with Nissan [Elimelech] and his team to bring this revolutionary technology to surgeons around the world.”
The xvision Spine System Commercial Launch
Augmedics’ 2020 employee-led Series B round of financing allowed the company to commercially launch its xvision Spine System. In June 2020, the first spine surgery utilizing the xvision Spine System was completed on a patient at Johns Hopkins Hospital in Baltimore, Maryland. For OTW’s coverage of the surgery, see “Augmented Reality Enters the Operating Room in First Spine Surgery.”
During the second half of 2020, Augmedics began selling the xvision Spine System throughout the United States. The company had a successful 2020 debut for its xvision Spine System in both hospitals and surgical centers. By the end of the year, and in the midst of a global pandemic, over 250 spinal surgeries had been performed using the xvision Spine System.
In the press release Robertson commented on Augmedics’ 2020 success, stating, “Augmedics is a commercial success story of integrating breakthrough medical technology into complex surgeries, a trend that we believe will only grow stronger. The significant volume of sales they [Augmedics] had in a short period of time during the COVID-19 pandemic indicates the strong demand for the xvision system by spine surgeons.”
Robertson continued, “We are excited to be partnering with the company’s experienced leadership team, comprised of leading medical AR development professionals, experienced marketing and sales professionals, and a CEO who successfully led the company to success in a challenging year. This financing paves the way for continued growth and significant value creation.”
After Series C Comes ASCs and OUS Markets
Augmedics’ alphabet of funding rounds is a success story. Moving forward, the company will use its Series C funding to both evolve and expand.
The xvision Spine System is Augmedics’ first augmented reality product. With the financing, one of the company’s priorities is to “explore additional surgical applications for xvision beyond spinal surgery.”
In addition to expanding its product beyond spinal surgery, Augmedics also plans to continue to commercialize its current product in the United States and expand into markets outside of the United States (OUS). Augmedics has indicated that it will use some of the funding to pursue CE certification for European sales.
Enabling Augmedics’ international expansion is its overall product design. Augmedics designed the xvision system to “allow easy integration into any surgical facility worldwide.”
Murawski told OTW, “We plan to use the funds to increase the utilization of xvision, expand the installed base in academic and community hospitals, and open up the ASC [ambulatory surgery center] market while also seeking CE certification to expand into OUS markets. In addition, we’ll be accelerating the development of next generation products.”
Augmented reality has countless future applications both inside and outside of the operating room. Are you planning on using augmented reality in your operating room? Leave your thoughts in the comments below.
