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Ortho VCs Are Getting Soft, But Still Show Spine

Private investors in orthopedic companies still are backing traditional and large joint companies, but soft tissue and biomaterials are drawing a solid total of early-stage capital.

This past month’s news of the monster private equity financings of Small Bone Innovations Inc. and ConforMIS Inc. drew a bright, white hot light on the state of venture investing in orthopedics start-ups. Does the $144 million committed to Small Bone Innovations, a mega start-up committed to the extremities (or small bone) sector, reflect broader investor interest in that increasingly interesting sector? [See Deal][See Deal] Likewise, what does $50 million put into in knee replacement company ConforMIS so far say about the entrepreneurial interest in the large but sleepy large joint sector? [See Deal] (See "SBI and ConforMIS Think and Act Globally In Search for Funds," this issue, for a detailed look at the two deals. Also see "SBI, ConforMIS Think and Act Globally in Search for Funds" - Medtech Insight, 1 July, 2009..)

A review of data in Elsevier’s Strategic Transactions database revealed that venture investors aren’t showing much interest in funding start-ups targeting the small bone arena where SBI is operating. But they are putting some dollars behind young companies targeting the hip-and-knee markets, which is understandable given their size

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