Exclusive: Vertos Medical captures $26M Series C

Med tech company Vertos Medical raised a $26 million Series C, which the company is hoping will be its final private fundraise before a public market debut, CEO Eric Wichems tells Aaron exclusively.

Why it's the BFD: Chilly IPO markets are showing signs of thawing and the med tech sector is particularly primed for an active 2024.

Details: The round was led by new investor Norwest Venture Partners.

• Existing investors, including Pitango Venture Capital, also participated.

What's next: "We are on a path to break even, and ideally, this will be the last financing before going IPO next year or so," Wichems said in an exclusive interview with Axios.

• "We are high growth, demonstrated a profitable business in an under-penetrated market, and we are not burning cash like crazy," he continues.
• Alongside helping expand its sale and commercialization footprint, fresh funds may finance potential M&A, Wichems notes.
• "If we find a good product, anywhere from early to commercial ready, we will be acquisitive," Wichems says.
• Wichems declined to comment on company valuation but added that this is an "up round."

How it works: The company makes minimally invasive medical devices to guide procedures treating lumbar spinal stenosis (LSS).

• It's best known for "mild," which is an image-guided outpatient procedure that removes a large root cause of LLS via a small incision
• The procedure is nationally covered by Medicare and more than 1,000 physicians in the U.S. are performing it.

What they're saying: "A lot of the work is building a standard of care and educating physicians and the public about this therapy before we go public," says Wichems.

• "It is a serious problem, and often people think it is a mechanical problem — but in reality, you just need to release pressure on the spine and don't have to restructure the whole back," Norwest Venture Partners general partner Zack Scott tells Axios.

Flashback: This is Scott's second rodeo with Vertos, having invested in the company back in 2014 when he was a managing partner at Revelation Partners.

• "Back then, I thought Vertos could get profitable without outside capital most likely, as they were just scratching the surface on market share in the space," Scott said.
• Now, Vertos has "one of the largest sales forces and footprint in sales in the interventional pain space," he says.