Augmedics Employees Lead $15 Million Series B Financing

Augmedics has raised $15 million in Series B financing, led by its U.S. staff. The company’s employees formed limited liability company AUG Management LLC to raise $4 million in an effort to secure and successfully launch the company as venture capital (VC) all but evaporated during the COVID-19 pandemic.
 
In December, Augmedics announced U.S. Food and Drug Administration (FDA) 510(k) clearance and the U.S. launch of its xvision Spine system (XVS). xvision Spine allows surgeons to visualize the 3D spinal anatomy of a patient during surgery as if they had “x-ray vision,” and to accurately navigate instruments and implants while looking directly at the patient, rather than a remote screen. The system is designed to revolutionize how surgery is done by giving the surgeon better control and visualization, which may lead to easier, faster and safer surgeries, according to the company.
 
Augmedics began Series B fundraising in the third quarter of 2019 with a goal to close the round by Q2 2020 after successful commercialization of its groundbreaking 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. It received several VC offers and was poised to make final investor decisions and sign term sheets in March, when the COVID-19 pandemic suddenly 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 successfully launch its groundbreaking technology.
 
‘An Unusual Effort’
Inspired by success to date, the mission of the company, and the passion of the employees, Augmedics president and chief commercial officer (CCO) Tim Murawski led an unusual 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 propelling its successful commercial launch. Together with their families, the 20 U.S. employees invested $4 million via AUG Management LLC. Existing shareholders, AO Invest and Terralab Ventures, participated in the financing round with a $3.2M investment, and undisclosed investors converted the remaining $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.”
 
The Augmedics xvision Spine System has now successfully launched and is being used in hospitals and surgical centers in the U.S. to help surgeons care for patients.