A pair of Wisconsin investors have increased their financial backing in a Minnesota-based medical device company with Wisconsin ties.
Based in the Twin Cities suburb of Plymouth, HistoSonics, a developer of technology that fights liver cancer with sound waves, said it has raised $102 million in an oversubscribed Series D investment round.
The investment marks Minnesota's largest VC round in two years.
HistoSonics said it will use the funding to support commercial growth of its noninvasive Edison Systems device.
The company is also growing its physical footprint: The Minneapolis/St. Paul Business Journal reported last month that HistoSonics will double the size of its headquarters, using the new space for storage, offices, labs, a warehouse, an education center, expanded production space and new employee amenities.
The new funding round was led by Alpha Wave Ventures of New York, with participation from new investors Amzak Health (also of New York) and HealthQuest Capital of San Francisco.
Wisconsin investors participate in HistoSonics' Series D
Existing investors that also participated include Venture Investors LLC and the State of Wisconsin Investment Board (SWIB) in Madison.
Venture Investors — a venture capital firm with locations in Madison, Milwaukee and Ann Arbor, Michigan — was an early investor in HistoSonics. It led the company's 2009 spin-out from the University of Michigan and also led the startup's first two rounds of financing. Venture Investors Executive Managing Director Jim Adox is chairman of the HistoSonics board.
Madison-based SWIB oversees retirement trust funds, state funds and money from Wisconsin municipalities, sometimes investing the money to gain returns and increase value. SWIB and Venture Investors participated in HistoSonics' $40 million capital raise in 2020 and in an $85 million Series C round in 2022.
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HistoSonics' connections to Wisconsin run beyond receiving money from investors. The University of Wisconsin-Madison played a critical role in animal studies prior to a clinical trial leading to FDA approval in 2023, and the Medical College of Wisconsin treated a patient as an approved site in the clinical trial, Venture Investors' Milwaukee-based Chief Financial Officer and Managing Director David Arnstein told the Milwaukee Business Journal last fall.
Largest VC deals in Minnesota
So far, Minnesota-based startups raised a collective $725 million through the second quarter of this year, up by about $125 million from last year. With HistoSonics' latest round, it brings Minnesota's VC funding closer to the $1 billion mark. Statewide, startups raised more than $1.2 billion in VC funding in all of 2023.
HistoSonics' round is easily the largest private funding deal of 2024 so far for a Minnesota company. And it's likely the largest since 2022, when cybersecurity firm Arctic Wolf raised more than $400 million in a convertible note. (HistoSonics was tied for second place that year, raising $100 million.)
The second-largest deal of 2024 is Niron Magnetics' $90 million round. The company, which is developing magnets made without rare-earth materials, reported the round to the Securities and Exchange Commission in January at $86 million and amended it in March.
For the second quarter of 2024, Medtech company Endogenex closed the largest deal. Plymouth-based Endogenex, founded in partnership with Mayo Clinic, raised $88 million to develop a treatment for Type 2 diabetes.
