With new unicorn status, CMR Surgical sets profitability target

CMR Surgical’s private round is the largest ever venture deal for a European medtech. And the point is to get to profitability, not flotation.


When CMR Surgical raised $100m in a series B round last June it said the money would be put towards commercialising its Versius robotic surgery system. Now it has brought in a $243m series C, valuing the company at more than $1bn, and says this cash is for the same purpose. 

There has been no delay, its chief executive, Martin Frost, tells Vantage: “The market opportunity got bigger, and we wanted to make sure that we were fully funded to address it all. We wanted to bring on board all the capital we would need to get the company into profitability.”

This point should come in 2021 or 2022, Mr Frost says, aided by the “very imminent” launch of Versius in two unnamed European countries; the company intends to place “numerous” machines by the end of this year. Versius was CE marked in March, and will be used for procedures including gastrointestinal surgery, hernia repair and gallbladder removal. Launch will be expanded to all of Europe and some Asian countries soon afterwards, though Mr Frost says CMR does not expect to be selling a product in China for another two or three years. 

The company has plans for the US too. It has submitted a 510(k) application, and has an American sales force already set up. “We always planned that 2021 was going to be the year where we would seriously start to scale this business,” Mr Frost says, adding that this means placing hundreds of systems a year. 

It takes several months to produce a Versius system, as CMR’s suppliers are based all over the world, though the actual assembly only takes a few days. The group has capacity at its Cambridge, UK site to build a couple of hundred systems a year, and Mr Frost expects to be doing exactly that by the end of 2021. 


CMR will go up against Intuitive Surgical, the ruler of this sector for the past two decades. It might, however, get in ahead of the other two major groups trying to get a foothold here: Medtronic and Verb Surgical, a collaboration between Johnson & Johnson and Alphabet, Google’s parent company. 

Verb has been tight-lipped about its technology, and it is unclear when details of its clinical performance or marketing plans might emerge. Medtronic, by contrast, has scheduled a hyped-up unveiling of its robotic surgery machine for this time next week. Little is known about its capabilities and what market niche it might occupy. 

“I’m looking forward to seeing it,” says Mr Frost. “I’ll be interested to see what they say about when they’re going to be entering the market commercially.”

Medtronic and Verb are perhaps a year or 18 months behind CMR, so competition is something to worry about down the road. But Intuitive is ready and waiting, and with revenues of $3.7bn last year and a market cap of $60bn it is a behemoth to take on. 

Mr Frost says that in five years’ time the market will be big enough to support three or four different robotic platforms, since hospitals often want to buy more than one system to fulfil different purposes. He is, of course, certain that Versius will be one of them, and that the company will be “standing shoulder to shoulder” with Intuitive and the other big groups.

This is partly because of CMR's pricing strategy, he says, which essentially uses a subscription model. Customers will pay annually for a managed service agreement, permitting access to the machine and unlimited disposable instruments. Intuitive’s da Vinci machines cost upwards of $1.5m apiece, with instrument costs on top. 

Foreign bodies

A fast-expanding market, a fast-scaling company, global sales plans. If this all pans out as CMR hopes its investors could do very nicely. 

One has been on board right from the start: Cambridge Innovation Capital has chosen CMR as its largest investment and the group is CIC’s most significant portfolio company. Robert Tansley, a partner at CIC, is confident that his company will make its money back rapidly once Versius gets on a commercial footing.

“For the whole area of medical robotics the time has come,” Mr Tansley says. “Intuitive have owned the market for the last 20 years, and what we see now is a number of key competitors coming in. CMR is very well placed for that.”

The round is not a mezzanine or crossover, Mr Tansley says, but it does give CMR the flexibility to decide whether to go public in the future. If Versius is the kind of success CMR expects a listing is presumably on the cards at some point, though Mr Frost says it will not happen for at least a couple of years.

If CIC is close to home, being based in the same town as CMR, CMR’s other investors are more far-flung. The series C round was led by LGT Capital Partners, part of the LGT Group owned by the Princely House of Liechtenstein, and another member of the syndicate was Zhejiang Silk Road Fund. Both had participated in earlier rounds. 

“In some ways it would be nice to have more UK investors,” says Mr Tansley, “but I think it’s just a reflection of where the capital is at the moment, and we’re very pleased to have in this round some highly credible US investors coming in.”

These US backers have opted to remain anonymous for now. Investors could have many reasons to keep their names under wraps – one possibility is that they could be other medtech groups with a strategic interest – but until CMR files its annual accounts at Companies House the investors, and their reasons for secrecy, are a mystery.

The long-term future of CMR might involve an IPO or a takeover or both. But it is the next two or three years that will show whether the company can execute its aggressive plans, and whether its investors, at home and abroad, are right to be so bullish. 

CMR Surgical's VC funding
Date Round Investment ($m) Investors Investor location
Sep 17, 2019 Series C 243.0 LGT Capital Partners Vaduz, Liechtenstein
      Escala Capital Madrid, Spain
      Cambridge Innovation Capital Cambridge, UK
      Watrium Oslo, Norway
      Zhejiang Silk Road Fund  Hangzhou, China
      Vestland Invest Oslo, Norway
      Unnamed new US-based investors US
Jun 4, 2018 Series B 100.0 Cambridge Innovation Capital Cambridge, UK
      Escala Capital Madrid, Spain
      LGT Capital Partners Vaduz, Liechtenstein
      Zhejiang Silk Road Fund  Hangzhou, China
      Watrium Oslo, Norway
Sep 18, 2017 Series A+ 26.0 ABB Technology Ventures Zurich, Switzerland
      Cambridge Innovation Capital Cambridge, UK
      Escala Capital Madrid, Spain
      LGT Capital Partners Vaduz, Liechtenstein
      Watrium Oslo, Norway
Jun 18, 2016 Series A 20.3 ABB Technology Ventures Zurich, Switzerland
      Cambridge Innovation Capital Cambridge, UK
      LGT Capital Partners Vaduz, Liechtenstein
  Total 389.3    
Source: EvaluateMedTech, company websites.

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