One of Greater Cincinnati’s best-funded startups has secured a $7 million debt facility from a stalwart in the venture capital community to help accelerate its commercial efforts.
Rapidly growing Blue Ash-based Standard Bariatrics, which is developing medical devices for the surgical treatment of obesity, said Monday it closed a debt facility with Silicon Valley Bank, effective April 27.
The debt facility, considered a non-dilative, low-cost alternative financing option by startups, provides $7 million in term loans, Standard said, including $4 million of which was funded at closing.
The money will be used to accelerate commercial efforts for its flagship device, the Titan SGS, a surgical stapler, as well as related proprietary medical devices designed for bariatric surgery, the company said.
“While our balance sheet is very strong, we are adding this debt facility to allow for greater speed and flexibility, further securing our supply chain and scaling our administrative capabilities," Peter Donato, Standard Bariatrics CFO, said in a release. “We continue to exceed sales and production expectations.”
The Titan SGS received FDA approval in April 2021. The device features a first-of-its-kind design to help surgeons perform laparoscopic sleeve gastrectomy, a common weight loss procedure, with more consistency, reducing the risk of anatomy variations, thus improving patient outcomes.
The company said the device continues to gain traction. Standard Bariatrics quickly hit $1 million in sales for the Titan SGS between August and November last year.
Standard Bariatrics is now generating $1 million in sales per month and growing. The Titan SGS has been used in 2,500 clinical cases to date.
“Early results give us the confidence to keep investing in Titan SGS and its adjunct technologies,” Karen Spilizewski, a Standard Bariatrics board member and VP with RiverVest, a St. Louis-based life science venture capital firm, said. "The advantages are resonating with bariatric surgeons, and the community of users continues to expand quickly.”
Silicon Valley Bank, founded in 1983, has more than $220 billion in total assets and has funded and financed the likes of Airbnb, Fitbit, Pinterest, Uber, Lyft and TrueCar.
Locally, it’s provided debt financing or term loans to data startup Astronomer and Mason-based medical device maker Atricure (Nasdaq: ATRC), among others.
Under the terms of its new debt facility with Standard Bariatrics, Silicon Valley Bank will make loans available in two tranches. The first tranche of $4 million was received at closing. Standard Bariatrics said $400,000 was used to retire existing debt.
The second tranche of $3 million will be available through June 30, 2023, as Standard Bariatrics hits certain business milestones.
Standard Bariatrics, founded in 2014 by Dr. Jon Thompson, a UC Health surgeon who also established the Thompson Center at the University of Cincinnati Research Institute, employs more than 50.
It's one of the region’s best-funded startups, with more than $55 million raised to date. Investors include Queen City Angels, CincyTech and River Cities Capital locally as well as Jobs Ohio, North Coast Angel Fund, Accelerant, Hatteras Venture Partners, RC Capital and Emergent Medical Partners.
