MD248600

Driving innovation in surgical precision with its AI-powered Surgical Precision Enhancement system, which enhances outcomes in robot-assisted and laparoscopic surgeries. A goal that is personally significant to the founder and CEO, a cancer survivor who endured multiple surgeries and complications. Designed to reduce complications and reoperations, SPE leverages real-time 3D mapping and advanced tissue recognition, offering surgeons unparalleled accuracy without disrupting existing workflows.

Positioned in a $10.1B global market, the company is on the verge of clinical testing in major hospitals and seeks $3M to complete development and secure FDA approval, targeting revenue generation within 24 months. Its patented technology and strategic partnerships set it apart from competitors, making it a strong candidate for investment.

Overview

Industry: Healthcare (Surgical Robotics)
Founded: 2022
Headquarters: Denver, US
Mission: To improve outcomes in robot-assisted and laparoscopic surgeries by enhancing surgical precision, reducing complications, and minimizing reoperations.
Unique Value Proposition: Groundbreaking AI-driven system that transforms surgery by combining real-time 3D mapping, augmented intelligence, and cancerous tissue recognition. Seamlessly integrating with existing robotic systems, it empowers surgeons to "see the unseen," enhancing precision while making surgeries faster and safer. By reducing complications and reoperations, the system not only improves patient outcomes but also accelerates procedure times, allowing operating rooms to fit in more surgeries per day. This capability increases hospital efficiency and revenue, setting a new gold standard.

Problem & Solution

Problem: During robot assisted and laparoscopic surgeries, surgeons must firstobtain the “Critical View of Safety (CVS)” else they risk incomplete results and measurably increased complication rates. Incomplete results may require reoperation while surgical complications commonly require longer hospital stays and additional costly procedures and/or drug therapies. The results include negative impacts on the patient’s health and recovery, and increased treatment costs.
Significance: According to the US National Institutes of Health (NIH), approximately 6% of patients undergoing laparoscopic cholecystectomy (gallbladder surgery) experience surgical complications, with each complication costing around $25K.This results in an estimated total of $900M annually in the US. Additionally, the NIH reports that conversion from laparoscopic to open cholecystectomy occurs in as many as 15% of cases, typically requiring an extra three to five days in the hospital, which adds over $1B to annual healthcare costs.
Solution: The SPE system enhances surgical outcomes byproviding real-time feedback and guidance, helping surgeons achieve the Critical View of Safety and make informed decisions, thereby minimizing the risk of surgical mishaps that could lead to reoperation or conversion to open surgery. It improves visualization by intercepting the video signal between the surgical camera and the surgeon’s display, processing images instantly to overlay critical information, label anatomical features, and place "guardrails" around sensitive areas. Additionally, utilizing technology licensed from the University of Minnesota for cancerous tissue recognition, SPE enables surgeons to visualize challenging details, ultimately improving precision and outcomes in robot-assisted and laparoscopic cholecystectomy surgeries.

The SPE system stands out forseveral reasons, making it unique and superior to current approaches and competing products:

Real-Time Augmented Intelligence - Unlike traditional surgical tools, SPE leverages real-time AI-driven analysis to process and enhance video images during surgery. This allows for immediate identification and mapping of critical anatomical structures and cancerous tissues, providing surgeons with enhanced decision-making capabilities during procedures.

Mapping and Guardrails - SPE creates a dynamic 3D map of the surgical field, labeling key anatomical features and placing "guardrails" around sensitive anatomical structures like nerves, ducts, and vessels. This helps surgeons navigate complex procedures with greater precision and safety, reducing the risk of accidental damage to healthy tissue.

Cancerous Tissue Recognition - Based on patented technology licensed from the University of Minnesota, SPE is equipped with a cancerous tissue recognition feature. This unique capability allows surgeons to differentiate between cancerous and healthy tissues with a higher degree of accuracy than conventional methods, leading to more effective tumor removal and fewer reoperations.

Integration with Existing Systems - SPE is designed to work seamlessly with existing robot assisted and laparoscopic systems. It requires no significant changes to surgical workflows oradditional hardware, making SPE easy to adopt without disrupting current practices.

Enhanced Visual Clarity - SPE offers surgeons the ability to "see the unseen" by providing enhanced visual information that would be difficult or impossible to detect with the naked eye.This improved visibility contributes to better outcomes and lower complication rates. By combining real-time augmented intelligence, advanced tissue recognition, and seamles sintegration with existing tools, it offers a superior solution that enhances surgical precision, reduces the need for reoperations, and improves patient outcomes.

Market Potential

Target Market: Global general surgery operating rooms, hospitals, and ambulatory surgery centers.
Market Size:

TAM: $10.1B → all operating rooms worldwide
SAM: $6B → all operating rooms in the US
SOM: $1.2B → top 20% of US operating rooms
Growth Rate: Grand View Research states: “The global operating room equipment market size was valued at$43.2 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.4%from 2023 to $75.4B in 2030.”
Market Trends:

The landscape of healthcare is rapidly evolving, particularly in the realm of surgical procedures. As the global demand for robot assisted and laparoscopic (minimally invasive) surgeries continues to surge:

Markets And Markets reports: “The size of the global minimally invasive surgery market in terms of revenue was estimated to be worth $79.3B in 2024 and is poised to reach $179.3B by 2029, growing at a CAGR of 17.0% from 2024 to 2029.”

World Health Organization reports: “Over 35 million new cancer cases are predicted in 2050, a 77% increase from the estimated 20 million cases in 2022.”

MD Anderson Cancer Center reports: “About 60% of patients will undergo some type of surgery to treat their cancer.”
Customer Segments:
‍
Hospitals and Surgical Centers: Facilities that specialize in cancer surgeries and other complex procedures requiring precision. This includes both hospitals and specialized surgery centers.

Surgeons (Oncological, Laparoscopic, and Robotic-Assisted): Surgeons performing minimally invasive procedures, such as oncologists, laparoscopic surgeons, and surgeons using robotic-assisted systems like those from Intuitive Surgical and Medtronic.

Healthcare Systems and Networks: Large healthcare networks looking to adopt innovativetechnologies to improve surgical outcomes, reduce costs associated with reoperations, and enhance patient care.

Academic Medical Centers and Research Hospitals: Institutions focused on innovation insurgical technologies and advancing cancer treatments through research and clinical trials.

Product

Core Features:

‍Real-time video processing and AI-driven analysis for enhanced visual overlays.
‍Dynamic 3D mapping and guardrails to protect critical anatomy.
‍Cancerous tissue recognition technology licensed from the University of Minnesota.
‍Seamless integration with existing robotic surgery systems.
Development Stage: The system design and pseudo-coding of the SPE system has been completed. The next step isto construct the MVP and perform usage testing.
Technology Stack:

Artificial Intelligence (AI) & Machine Learning (ML) - AI and ML algorithms will be at the core of SPE’s real-time image analysis, enabling the system to recognize anatomical structures, identify cancerous tissues, and generate precise 3D maps.

Deep learning models, particularly convolutional neural networks (CNNs), will be used for image recognition and classification tasks, trained on large datasets of surgical images and cancerous tissue samples.
Intellectual Property: Includes a full patent application, provisional patents, and licensed technology.

1 Full Patent Application + 3 Provisional Applications
2 Design Patent Applications
1 Licensed Patent - University of Minnesota
3 Granted Trademarks
Trade Secrets
Product Roadmap: Focused on cholecystectomy surgery, the SPE minimum viable product (MVP) will contain thefollowing features:

User Interface
Real-Time Image Processing
Anatomical Labeling
"Guardrail" Feature
Cancerous Tissue Recognition
Voice Controls
Future Development:

Surgical Procedure Training: Train SPE to support a broad range of surgical procedures.

Application Integration: Develop enabling technology to allow interfaces to Electronic Health Record, Pathology Workflow, and Radiology Workflow systems.
Development Timeline:
‍
2023: Research and analysis.
2024: Product design and IP filings.
2025: Build MVP, conduct user studies, and file US FDA 510(k) application.
2026: Based on market demand, train SPE to support other surgical procedures.

Business Model

Revenue Model: Offering two license alternatives -

‍Option 1: Perpetual license ($25,000 per operating room) + 20% annual support. This approach best serves customers who prefer to depreciate software assets.
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Option 2: SaaS model ($7,500 per operating room, per year). This approach serves customers who prefer to expense software and government-run hospitals who commonly receive funding on a per annum basis.
Sales Channels: Direct marketing to hospitals and healthcare systems, supported by clinical studies.
Key Partnerships: Multiple hospitals across the U.S. and Israel, as well as academic institutions, including the University of Minnesota.

Financials

Current Status: Pre-revenue
Burn Rate: ~$20,000/month
Runway: The founder is presently bridging the company and has funds available to maintain the current funding level for 12 months.
Funding to Date: $1.2M from founder and $300K from friends and family
Projections: With a 50/50 split between perpetual and SaaS models, targeting 85% gross margins with an estimated 15-30% net profit margin (depending on ongoing R&D spend). Annual revenue projections:

2026: $1.4M
2027: $4.4M
2028: $13.3M
2029: $40M
2030: $120.4M

Team

Founder: A seasoned executive with extensive experience in business development, technology sales, and intellectual property. Inspired by his personal journey as a cancer survivor, he founded the company to revolutionize cancer surgery by improving precision and reducing costs. He has a proven track record of leading successful product launches and securing strategic funding, driving substantial returns for investors. Prior to this, he led a consulting firm, working with major tech companies to boost revenue and efficiency, and held leadership roles in driving sales of cutting-edge digital technologies.
Key team members: Specialists in medical device development and healthcare technology.
Hiring Plans: Specialists in medical device development and healthcare technology.
Future Hiring Plans:

Immediate - CTO, Marketing Manager, and Regulatory/QA Manager
Mid-2025 – Marketing Communications Manager, Direct Sales, and Customer Support Reps

Competitive Analysis

Direct Competitors: Limited; no "apples to apples" competitors. Four companies in nearby segments are on their radar screen.
Competitive Advantage:

First mover advantage
Unique Cancerous Tissue Recognition Technology
Real-Time 3D Mapping and Anatomical Labeling
Seamless Integration with Existing Surgical Robots & Laparoscopes
Data-Driven Outcomes and Reduced Costs
Founder’s Leadership and Vision
Exclusive Technology Licenses (University of Minnesota)
Focus on Minimally Invasive Surgery
Scalability and Customization
Barriers to Entry:

Exclusive Patented Technology (Intellectual Property)
First-Mover Advantage
Technological Complexity and Expertise
Studies and Regulatory Approvals
Seamless Integration with Existing Systems
AI and Machine Learning Data Models
High Switching Costs for Hospitals
Brand Reputation and Trust

Traction

Partnerships: Six hospitals have agreed to test the SPE system.
Customer Feedback and Testimonials: None yet, although the two most common questions they hear are: 1) why didn’t someone invent this years ago, and 2) when can we get it in our hospital?
Milestones: Completed partnerships with hospitals and academic institutions, ongoing product development, and IP licensing.

Risks & Mitigation

Market Risks: Surgeons and healthcareproviders may be resistant toadopting new technologies,especially if they require changesto existing workflows oradditional training.

Mitigation Strategy → Engage key opinion leaders (KOLs). Offer pilot programs to develop trust. Demonstrate value and outcomes through published results in medical journals. Provide continuous product enhancements.
Operational Risks: Difficulty in attracting and retaining skilled personnel, particularly in specialized fields like medical device development and surgical technologies, can hinder operational efficiency.

Mitigation Strategy → Offer competitive compensation and benefits. Opportunities for advancement. A positive work environment. Flexible work arrangements.
Operational Risks II.: Difficulty in attracting and retaining skilled personnel, particularly in specialized fields like medical device development and surgical technologies, can hinder operational efficiency.

Mitigation Strategy → Has implemented a robust quality management system (QMS).Will provide on-going training toour team. Implement fail-safe procedures.
Financial Risks: Reliance on external funding for development and operational activities makes the company vulnerable to changes in investor sentiment and market conditions.

Mitigation Strategy → Diversify funding sources to reduce dependency on any single source of funding. Foster strong relationships with existing investors. Regularly communicate updates about the company's progress to maintain investor confidence and support. Establish revenue streams early.
Financial Risks II.: Economic downturns can impacthealthcare budgets andspending, potentially leading toreduced investment in new technologies by hospitals andsurgical centers.

Mitigation Strategy → Offer flexible pricing options and be open to prospective customer needs. Focus on the value proposition. Adapt SPE or develop products that cater to cost-sensitive segments of the market.
Regulatory Risks: The medical device industry is heavily regulated, and any delays or challenges in obtaining necessary approvals from regulatory bodies can hinder product launch and market entry.

Mitigation Strategy → Emet Surgical has initiated early discussions with the FDA help clarify requirements and expectations, ensuring SPE’s 510(k) application fulfills all requirements and allowing for a smoother approval process.

Funding Requirements

Amount Being Raised: $3M
Use of Funds:

Product Development - $1.5M to complete MVP, test at 6 hospitals, and prepare and file SPE’s FDA 510(k) application.

Key Hires - $600K to hire CTO, Sales Manager, and Regulatory – QA/QC Manager

Intellectual Property - $250K to file patent applications and prosecute pending applications, including international counterparts.

Grant Consultant - $150K to engage a grant consultant and submit applications for grant funding.

General Business Expenses - $500K for non-executive salaries, rent, insurance, etc.
Runway: 24 months, covering MVP completion, testing, and FDA clearance to the point where revenue can be generated.
Previous Funding Rounds:

‍Amount Raised: $300K
Investors: Friends & Family, including two family offices
Valuation: $3M post-money

Exit Strategy

Potential Buyers: Major surgical robots, laparoscope manufacturers, and tech and AI companies.
Estimated Exit Timeline: 3-5 years, with ongoing discussions with over 17 potential acquirers.