We’ve been tracking Formus Labs for a while; and from the very first time we met with Founder Ju Zhang and the wider team, we were impressed by their passion and vision to modernize a part of the care continuum that is still woefully underserved.
Formus Labs has a strong and powerful vision - to empower orthopaedic surgeons worldwide to employ state-of-the-art planning processes with 3D imaging and analytics as the new standard of care. The startup has launched the world’s first automated 3D planner for joint replacement surgeries and is set to revolutionise orthopaedics globally.
We’re excited to announce that GD1 Fund 3 has led Formus Lab’s US$5M Pre-Series A round and we couldn’t be more excited to support their mission to deliver state-of-the-art, personalized, data-driven and scalable orthopedic care globally.
Why the tech is so exciting
Formus Labs is ushering in the future of orthopaedic planning by fully automating joint replacement pre-operative planning processes. It uses artificial intelligence and advanced cloud-based biomechanics modelling to calculate a patient’s implant fit, function, forces and posture and is the most accurate, fast and sophisticated solution available in market. Interactive 3D models pinpoint the size and orientation required before a patient even enters the operating room.
With Formus Labs, a surgeon can get automated, specific plans that are personalized to each patient. The software is able to deliver plans in an hour and can be updated in real-time, making same day 3D planning a reality. It also allows surgeons to work on cases remotely at any hospital anywhere in the world, significantly reducing patient wait times, improving overall workflow and ultimately creating better outcomes for patients.
Formus Labs was founded by Dr. Ju Zhang and Prof. Thor Besier, and is set to be one of the next success stories to spin out of the Auckland Bioengineering Institute (ABI) at the University of Auckland.
Ju is extremely thoughtful, has strong product and market instincts, and possesses demonstrable leadership qualities to grow a first-class team and lean into the company’s incredible expansion opportunity.
An sizeable market opportunity
The world’s population is growing and getting older. Across the four major joint replacement segments - hip, shoulder, spine and knee - the worldwide industry is worth around US$28B annually. What’s more, the proportion of the global population aged 65 and over is expected to grow from 9% to 12% by 2030, representing around one billion people, with the number of required joint replacement surgeries anticipated to double.
There is widespread agreement that the process around orthopaedic surgeries remains inefficient, with poor surgical planning and execution, resulting in undesirable and unacceptable outcomes. Right now, there are over 200,000 revision surgeries performed annually in the US alone. Globally, one in five knee replacements are unsatisfactory and one in ten hip replacements need revision, which ends up costing the orthopedic industry $10 billion (USD) per year.
Whilst joint implant hardware has been refined with greater precision, the analysis and planning around the selection of implant size, technological advancement around joint placement and overall pre and post-operative mechanics have been largely neglected. These often rely on somewhat antiquated methods, such as those that require human intervention to construct and review pre-operative plans, adding time, cost and unnecessary complexity to the treatment process.
The Formus Labs solution will modernise the orthopaedics industry, with tremendous benefits to patients, surgeons and hospitals:
A solid go-to-market strategy
The potential for Formus Labs to disrupt existing outdated solutions with a data-driven, AI product has resonated, with impressive early customer traction for their pre-operative planning product. Furthermore, there is an enormous opportunity to accelerate growth by investing in marketing, international expansion and product development.
Formus has formed an enviable distribution partnership with Zimmer Biomet, a global leading orthopedic medical device company, who are committed to the co-development and commercialization of Formus Hip in Australia and New Zealand, as well as the investigation of international markets for global expansion.
Although elective surgeries have temporarily slowed in New Zealand and Australia due to a resurgence in Covid case volumes, global evidence proves that hospitals have repositioned around performing elective surgeries during Covid due to commercial motivations as well as the need to clear the growing backlog of cases. We do not anticipate any long-term systemic impact.
Formus has already launched its product offering in Australia and New Zealand, to be followed by focused and strategic product evaluation in the United States after expected FDA approval in mid-Q2 2022.
The company is rapidly expanding its team, both in ANZ and the US, including strategic computer-guided orthopedic surgery experts, engineering, commercial, and marketing roles.
GD1 considers Formus Labs to be a category creator. In addition to market expansion, GD1 will assist with maximising the commercialisation of its data analytics capabilities as well as integration with other product segments, including intra-operative, prehab and rehab planning and treatment.
We sincerely appreciate the support of existing investors UniServices and FKA, as well as that of new investors working alongside us to ensure Formus Labs can ‘believe bigger, including Icehouse Ventures, Punakaiki Fund and Pacific Channel.
I would also like to express my appreciation to a very special community of people and firms who were instrumental in making this investment happen.
Now, let’s go change the world together!