June 15, 2020 – Augmedics, a provider of augmented reality (AR) surgical image guidance solutions, has announced that it has raised USD $15 million in Series B financing, led by its own US staff. The company’s employees formed the limited liability company ‘AUG Management LLC’ to raise USD $4 million in an effort to secure and successfully launch the company, as options for venture capital (VC) investment disappeared during the COVID-19 pandemic, according to the company.
In December, Augmedics announced US Food and Drug Administration (FDA) 510(k) clearance and the US launch of its xvision Spine system, an AR guidance system to be used in surgery. xvision Spine allows surgeons to visualize the 3D spinal anatomy of a patient during surgery as if they have “x-ray vision,” and to accurately navigate instruments and implants while looking directly at the patient, rather than a remote screen. The company states that its system is designed to revolutionize how surgery is done by giving surgeons better control and visualization, which may lead to easier, faster and safer surgeries.
Augmedics began Series B fundraising in the third quarter of 2019 with a goal to close the round by Q2 2020 after the successful commercialization of its xvision Spine System, slated for Q1 2020. While seeking a lead VC, the company raised SAFE investments (simple agreement for future equity) to continue operations. The company stated that it received several VC offers and was poised to make final investor decisions and sign term sheets in March, when the COVID-19 pandemic brought investor activity to a halt. That, compounded with a pause in elective procedures such as spine surgeries, led Augmedics to resort to creative measures in order to launch its technology.
Augmedics President and Chief Commercial Officer (CCO), Tim Murawski, led an effort to raise funds internally. Employees believed so strongly in the technology and the future of the business that they committed to securing the company and assisting with its successful commercial launch. Together with their families, the 20 US employees of Augmedics invested USD $4 million via AUG Management LLC. Existing shareholders, AO Invest and Terralab Ventures, participated in the financing round with a USD $3.2 million investment, and undisclosed investors converted the remaining USD $7.8 million SAFE notes.
“The dedication of our team and the leadership of President and CCO Tim Murawski is outdone only by the incredible innovation that they continue to demonstrate in the lab, in the field, and at the board table,” said Nissan Elimelech, founder and CEO of Augmedics. “The amount of money that the Augmedics employees committed to continuing operations shows how much they believe in what we are doing – in the technology, the strategy and the leadership – even in these uncertain times.”
“We are a team of problem solvers,” said Tim Murawski, president and CCO, Augmedics. “The creativity and ingenuity of our company began when Augmedics launched to solve a problem our founder saw in the operating room, and it runs through each and every employee who is working to make the vision a success. The global pandemic presented just one more hurdle for us to navigate as a team, and we believe it has only made the company stronger.”
The Augmedics xvision Spine System has now successfully launched and is being used in hospitals and surgical centers in the US to help surgeons care for patients. The company also plans to explore additional surgical applications for xvision beyond spinal surgery. The system’s small footprint, economical cost and compatibility with current instrumentation is designed to allow easy integration into any surgical facility nationwide, the company states.
Image credit: Augmedics