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Gary Stevenson channeled the words of Charles Dickens to describe the state of orthopedic funding. “It was the best of times, it was the worst of times,” Mr. Stevenson said.
Mr. Stevenson is Co-Founder and Managing Partner of MB Venture Partners and host of the Musculoskeletal New Ventures Conference (MNVC), positions that support his perspective on orthopedic investments.
“It is the best of times for startups in the commercialization stage because raising growth capital has been robust in 2023,” Mr. Stevenson said. He mentioned companies like Artelon, CurvaFix, Miach Orthopedics and Shoulder Innovations. Each company has closed financing rounds between $20 million and $45 million to accelerate the rollout of their products, and each will provide updates on their progress at MNVC in November.
By contrast, companies with products still in research and development find today’s environment extremely difficult. Mr. Stevenson hesitated to compare the fundraising situation to the 2008 global financial crisis but said early-stage companies face stiff headwinds. “Capital raises to fund new product development or PMA studies are much harder to close,” he said. “Investors are reluctant to take the clinical, regulatory or reimbursement risk often associated with early-stage startups.”
We’ve observed similar trends based on our conversations with startups and the tracking of funding announcements. We’ve also noticed that while spine — the most active market for funding and M&A activity — continues to see investments, other orthopedic segments are gaining attention.
About 28% of the funding announcements we tracked in 2002 were focused on enabling technology. That number has climbed in 2023.
“I expect enabling and digital technology startups to raise an increasing share of capital in the musculoskeletal space,” Mr. Stevenson said. “When I moderate panels that include strategics, I ask how much of their internal R&D and acquisition budgets are devoted to enabling technologies. Their percentages are even higher than ORTHOWORLD’s.”
Mr. Stevenson noted that several enabling technology companies are on this year’s MNVC agenda, including Caira Surgical, OrthAlign, OrthoGrid, Pressio Spine and TracX Technology.
In addition to enabling technology, Mr. Stevenson said extremities and sports medicine are two of the hottest orthopedic segments for investment and M&A activity.
He noted that foot and ankle companies CrossRoads Extremity Systems (one of MB Venture Partners’ portfolio companies) and In2Bones were acquired by DePuy Synthes and CONMED, respectively. CONMED acquired Biorez and Zimmer Biomet acquired Embody in the sports medicine segment. All four startups presented at MNVC in recent years.
“This type of strategic activity attracts capital to other startups in the space,” he said. “We have several extremities and sports medicine startups on the 2023 agenda.”
ORTHOWORLD is an MNVC sponsor. Like the investor community, we will attend the conference to identify startups, discover innovative technology and gain perspective on the financing and M&A landscape. This year’s agenda includes 30 startups seeking funding and well-known investors and strategics sharing their views on the market and offering counsel for companies.
Ahead of the conference, Mr. Stevenson’s main advice for startups is to raise enough capital to achieve the next important milestone.
“Existing investors and entrepreneurs are sensitive to dilution and try to raise as little as possible,” he said. “However, it’s important to raise enough to get to a vital valuation milestone plus cushion funding that allows for enough runway as you raise the next round. This is especially true in challenging fundraising environments like today’s.”
Gary Stevenson channeled the words of Charles Dickens to describe the state of orthopedic funding. “It was the best of times, it was the worst of times,” Mr. Stevenson said.
Mr. Stevenson is Co-Founder and Managing Partner of MB Venture Partners and host of the Musculoskeletal New Ventures Conference (MNVC), positions that support his...
Gary Stevenson channeled the words of Charles Dickens to describe the state of orthopedic funding. “It was the best of times, it was the worst of times,” Mr. Stevenson said.
Mr. Stevenson is Co-Founder and Managing Partner of MB Venture Partners and host of the Musculoskeletal New Ventures Conference (MNVC), positions that support his perspective on orthopedic investments.
“It is the best of times for startups in the commercialization stage because raising growth capital has been robust in 2023,” Mr. Stevenson said. He mentioned companies like Artelon, CurvaFix, Miach Orthopedics and Shoulder Innovations. Each company has closed financing rounds between $20 million and $45 million to accelerate the rollout of their products, and each will provide updates on their progress at MNVC in November.
By contrast, companies with products still in research and development find today’s environment extremely difficult. Mr. Stevenson hesitated to compare the fundraising situation to the 2008 global financial crisis but said early-stage companies face stiff headwinds. “Capital raises to fund new product development or PMA studies are much harder to close,” he said. “Investors are reluctant to take the clinical, regulatory or reimbursement risk often associated with early-stage startups.”
We’ve observed similar trends based on our conversations with startups and the tracking of funding announcements. We’ve also noticed that while spine — the most active market for funding and M&A activity — continues to see investments, other orthopedic segments are gaining attention.
About 28% of the funding announcements we tracked in 2002 were focused on enabling technology. That number has climbed in 2023.
“I expect enabling and digital technology startups to raise an increasing share of capital in the musculoskeletal space,” Mr. Stevenson said. “When I moderate panels that include strategics, I ask how much of their internal R&D and acquisition budgets are devoted to enabling technologies. Their percentages are even higher than ORTHOWORLD’s.”
Mr. Stevenson noted that several enabling technology companies are on this year’s MNVC agenda, including Caira Surgical, OrthAlign, OrthoGrid, Pressio Spine and TracX Technology.
In addition to enabling technology, Mr. Stevenson said extremities and sports medicine are two of the hottest orthopedic segments for investment and M&A activity.
He noted that foot and ankle companies CrossRoads Extremity Systems (one of MB Venture Partners’ portfolio companies) and In2Bones were acquired by DePuy Synthes and CONMED, respectively. CONMED acquired Biorez and Zimmer Biomet acquired Embody in the sports medicine segment. All four startups presented at MNVC in recent years.
“This type of strategic activity attracts capital to other startups in the space,” he said. “We have several extremities and sports medicine startups on the 2023 agenda.”
ORTHOWORLD is an MNVC sponsor. Like the investor community, we will attend the conference to identify startups, discover innovative technology and gain perspective on the financing and M&A landscape. This year’s agenda includes 30 startups seeking funding and well-known investors and strategics sharing their views on the market and offering counsel for companies.
Ahead of the conference, Mr. Stevenson’s main advice for startups is to raise enough capital to achieve the next important milestone.
“Existing investors and entrepreneurs are sensitive to dilution and try to raise as little as possible,” he said. “However, it’s important to raise enough to get to a vital valuation milestone plus cushion funding that allows for enough runway as you raise the next round. This is especially true in challenging fundraising environments like today’s.”
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Carolyn LaWell is ORTHOWORLD's Chief Content Officer. She joined ORTHOWORLD in 2012 to oversee its editorial and industry education. She previously served in editor roles at B2B magazines and newspapers.
