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17 September, 2019 - 07:03 By Tony Quested

Cambridge medical robotics pioneer CMR scales hugely as $240m Series C earns unicorn status

Robotics pioneer CMR Surgical has become the Cambridge UK technology cluster’s 18th unicorn business as a $240 million Series C round secured a billion dollar valuation – just three years after CEO Martin Frost turned down the chance to sell out for £100 million.

The record-breaking Series C has triggered massive expansion plans in Cambridge and worldwide as the medical devices trailblazer scales headcount and manufacturing. Cambridge will remain the launchpad for accelerated production of the robotic arm systems for keyhole surgery.

CMR is currently advertising for 120 new roles to add to its 400 local headcount and is examining physical expansion of its Cambridge HQ. A further 160 hires are anticipated as the business expands around the world.

Frost revealed to Business Weekly that he has hit the accelerator on global premises and recruitment expansion targets. CMR is already scaling from four continents and a spectacular further growth roadmap is being kept under wraps.

The Series C is Europe’s largest ever private financing round in the medical technology sector and Frost said the financing would fully fund the global commercial scale-up of the business to deliver the Versius® surgical robotic arm system to hospitals globally.

The fundraise has been led by Series A investor LGT Lightsone and backed by existing supporters, Escala Capital Investments, Cambridge Innovation Capital, Watrium, and Zhejiang Silk Road Fund as well as new US investors with deep sector knowledge.

Cambridge has never had such a spectacular success in the medical devices sector and Frost says he is committed to reaching for the stars from a base at the heart of the cluster despite being wooed by other hubs in the US and China.

Clinicians who have tested the robotic arm are returning rave reviews and wider trials are all hitting the sweet spot, prompting Frost to aver: “I am super confident that we will be selling systems to the NHS and customers in the UK and India this year. We have more demand for the product than we can currently meet so we are gearing up to produce 250 systems a year from Cambridge and then further scale from that base.

“Our ambition is to then ramp to build many hundreds of systems a year and onwards and upwards exponentially every two to three years; the market has never been so ripe for our brand of medical device or the wind of opportunity more in our favour.”

Frost said that while it was amazing to join Cambridge’s pantheon of $billion businesses, he held sustainability of success as significantly more important.

CMR Surgical is expected to launch in hospitals across Europe and Asia imminently with further international expansion expected thereafter. The company had around 20 people in Goa, India, 10 in the US who already provide coast-to-coast sales coverage, a small but growing presence in Europe and the capability of incredible expansion in China and associated Asian territories.

Frost met with royalty in the form of Prince Maximilian to clinch the lead investment in the Series C from LGT in Liechtenstein. The backing helped CMR to a $400m-plus raised haul to date. US investors also piled in.

Frost is determined to ensure that CMR’s rise and rise continues to be secured from a Cambridge base. He told me: “We could have sold the business three years ago. We were engaged in talks with a credible player and knew we had a fantastic proposition.

“The issue was whether under our own steam we could turn the IP into another Cambridge idea that changed the world – and we decided we could. We wanted to build a business that would hold a real legacy for the Cambridge technology cluster.

“The business now has a valuation of $1bn but I would be worried even if we only reached a valuation of $1.5bn from this point onwards; I would feel as if we had failed; that we could have done better.

“Cambridge has never had a business which has achieved such a plateau from a standing start in such a competitive global marketplace, certainly not in medical devices. Cambridge provides a fantastic platform for CMR to scale even further so there is no need for us to throttle back on our ambitions.”

Biomimicking the human arm, Versius provides dexterity and precision to surgeons. In addition, the versatility and affordability of the system means it can be used across a broad range of minimal access surgery (MAS).

CMR Surgical aims to make MAS universally accessible, rapidly increasing the number of robotic-assisted procedures that take place globally. The $3.7 billion global robotic-assisted MAS market is growing at 19 per cent a year.

Umur Hursever, partner, LGT Lightstone, said: “CMR Surgical has significant potential to make a real impact on the surgical robotics market. As an existing investor, we are confident that the company will disrupt the status quo and transform surgery for millions of people worldwide.”

Robert Tansley, partner of Cambridge Innovation Capital, added: “We would like to congratulate CMR Surgical on the fantastic progress that it has made which has allowed this successful Series C fundraise, the size of which is testament to the huge potential of its Versius system.

“CIC’s investment strategy is to build high-growth companies with differentiated, innovative technology within Cambridge and CMR is a great example of the high-quality science and technology coupled with strong ambition, present in the world-class Cambridge ecosystem.”

For the record, CMR joins a hallowed pantheon of unicorn companies gated in Cambridge – namely Abcam, Arm, Autonomy, AVEVA, Blinkx, CAT, Chiroscience, CSR, Darktrace, Domino, Improbable, Ionica, Marshall of Cambridge, Prometic, Solexa, Virata, and Xaar.

One could make a case for a 19th as Johnson Matthey, although born in London, has long been established in the Cambridge cluster and has a current market cap of £6.13bn.

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