It's fair to say that when most people think of Intuitive Surgical, they think of da Vinci and robotic surgery.
The company recently joined medtech giants before them like Johnson & Johnson and Boston Scientific in launching a corporate venture capital arm, which appears to take a broader view on minimally invasive care in its inaugural $100 million fund.
"Our mission in the venture fund is really to accelerate minimally invasive care; robotic surgery is one component of it, of course," said medtech veteran Julian Nikolchev, who joined Intuitive Surgical last year as its SVP of corporate development and strategy, and also serves as president of Intuitive Ventures (IV).
"But the other aspect is some of the new technologies and new tools that are coming in that space — digital tools, focal therapeutics and precision diagnostics."
Nikolchev and partner Oliver Keown, director of IV by way of GE Ventures, are interested in making investments ranging from $500,000 to $5 million. The pair didn't specify exactly what level of traction or evidence a startup might need to gain its backing but said "broadly, we're at the earlier end of the spectrum."
Intuitive gave a hint on the type of ideas it's looking to back via its first investment, awarded to KēlaHealth: a San Francisco-based healthcare data analytics startup founded in 2016 at Duke University Health System that provides a cloud-based software-as-a-service platform focused on "patient-specific predictive insight and risk stratification."
The company said in its own announcements that the $12.9 million seed and Series A round, to which Intuitive contributed an undisclosed amount, will support its product rollout to hospitals and other surgery settings across. the U.S. "Kēla really exemplifies management of patients using AI and ML to better support decision making," Keown said.
Whether or not investments like those in Kēla materialize into M&A opportunities for Intuitive remains to be seen. For now, IV views the investments as "independent initiatives." The VC fund, while new, builds on Intuitive's existing business development team that looks to co-develop technologies with other companies or reach licensing agreements, Nikolchev said.
The international fund's kickoff comes at a time when Intuitive Surgical is gearing up for a bevy of rivals poised to enter the robotic surgery market it has dominated for two decades.
With use of robots in the operating room now more established, and with more robot choices available to customers, manufacturers and buyers alike are spending more time considering additional tools that could be used in surgery to improve patient outcomes. They're also thinking about better cost structure and surgeon experience, Nikolchev said.
The timing of the launch also, of course, comes months into the COVID-19 pandemic, which Keown believes has been a catalyst for medtech investment.
Following a "natural pause" in VC activity at the beginning of the pandemic, Keown has seen "a tremendous uptick in investing and enthusiasm for medtech and digital health over the last six months."
Aside from the way COVID-19 may have catalyzed adoption of certain digital technologies, it's also tightened a "cost-contained environment" for customers that only raises the bar for the cost-benefit profile of new tools and how to manage limited resources under pressure, Keown said.