Equity Financing Generates $11.2M for Virtual Incision

Virtual Incision Corp., a startup company developing robot-assisted surgical devices, has closed $11.2 million of equity financing. Led by Bluestem Capital, the round was oversubscribed, according to the company, with participation from existing investors, including PrairieGold Venture Partners.

The funding will be used for a feasibility study on the use of the company’s miniaturized robot-assisted surgical technology for colon resection, a procedure performed to treat patients with lower gastrointestinal diseases such as diverticulitis, Crohn’s disease, inflammatory bowel disease and colon cancer.

“Virtual Incision seeks to enable a minimally invasive approach to a variety of procedures that are typically performed ’open’ today, with the potential to improve clinical outcomes and healthcare costs, which would benefit all stakeholders—patients, physicians, hospitals and payers,” said John Murphy, CEO of Virtual Incision. “We are excited that our technology holds the promise to make a meaningful impact for patients with colon conditions, who can face difficult procedures and long recovery times with traditional techniques.”

In contrast to today’s large mainframe-like robots that reach into the body from outside the patient, Virtual Incision’s less-invasive robot platform design features a small, self-contained surgical device that is inserted in its entirety through a single incision in the patient’s abdomen. Designed to use existing tools and techniques familiar to surgeons, the robot will not require a dedicated operating room or specialized infrastructure, and, because of its much smaller size, is expected to be significantly less expensive than existing robotic alternatives for laparoscopic surgery, company officials said. Due to these technological advances, the system could enable a minimally invasive approach to procedures performed in open surgery today.

Colorectal and lower gastrointestinal surgical procedures are growing by 14 percent each year, making these procedures the fastest-growing surgeries in the United States, the company claims.

“This financing is an exciting milestone that will allow Virtual Incision to gather clinical data and position the company for continued growth,” said Mike Jerstad, partner at PrairieGold Venture Partners and board chair. “I am impressed with the company’s progress over the past few years and look forward to the next phase in the technology’s development.”

“We look forward to working with Virtual Incision’s experienced team to build a very successful company,” added Tyler Stowater, partner at Bluestem Capital.

Virtual Incision has facilities in Lincoln, Neb., and Pleasanton, Calif. A spinout of technology developed at the University of Nebraska, Virtual Incision’s robot-assisted surgical technologies are supported by more than 90 pending and granted patents and 70 comparative medicine studies.