Osso VR nets $66 million for surgical training

San Francisco’s Osso VR collected $66 million in Series C funding led by Oak HC/FT, the parties tell Axios exclusively.

Why it matters: Surgical training hasn’t evolved in 30-plus years, but Osso VR is looking to change that by empowering health care professionals with virtual reality.

• Training and assessing surgeons more efficiently can drive up the adoption of modern and hard-to-learn medtech, and democratize surgical education.
• “The innovation from the medical device industry is providing us an incredible opportunity to treat patients much more consistently and with optimized outcomes,” said Justin Barad, Osso’s co-founder and a practicing pediatric orthopedic surgeon.

Details: Osso VR has now raised to about $109 million since 2016, and Barad expects to double its employee count to 300-plus by year-end.

• Signalfire, GSR Ventures, Tiger Global Management and Kaiser Permanente Ventures also participated in the funding.
• Its peers are largely focused on orthopedics, but Osso VR is developing modules across specialties such as spine, interventional cardiology, and more.

Zoom in: The funding will let Osso VR expand beyond its existing 150 surgical modules and specialties, while expanding access to health care professionals.

• With headsets, surgeons can explore new complex procedures at their own pace, plus practice and fine-tune skills much quicker. It also reduces travel and scheduling challenges.
• “Surgeons are genuinely interested in getting better at their craft,” Vig Chandramouli, a partner at Oak HC/FT, tells Axios. “This gamifies what they already do in their heads.”
• The benefits go beyond just the surgeon, addressing the “team variability challenge,” Barad said, by creating a way to rapidly onboard new surgical technicians that rotate in and out of ORs.

Between the lines: With a global estimate of about 1.1 million surgeons worldwide and 310 million major surgeries per year, the VR surgical training could drive “improvement in global [health care] delivery that’s rarely seen”, Barad says.

• Osso data shows that surgeons are able to cut down their time in the OR by half and improve performance by 230%.
• Performance data at the clinician level can command significant interest from payors, if leveraged correctly, Chandramouli adds.

What else: Osso VR could also level the playing field for sales reps at medtechs.

• Historically speaking, large medtechs had a resource advantage over smaller players.
• Osso VR “is changing that perception to say you don’t need to be in front of a clinician for them to get your product; there’s other ways to engage [to achieve mainstream adoption],” Chandramouli says.

Reality check: There’s a subset on the medtech side that believes VR needs to be hyper-realistic.

• “Those folks have to think about VR as speeding up the time to a cadaver lab, or reducing the number of times [in one],” the investor notes.
• “Practicing on a cadaver and only doing so once or twice is not getting us to that point where you can successfully adopt a procedure,” Barad adds.

The bottom line: VR-driven surgical training remains a nascent category, but Barad, who got his start in video game development, is now steering the world’s largest VR surgical training library with a lot of money behind it.

Source: https://www.axios.com/2022/03/24/osso-vr-nets-66m-series-c