The $45 million in additional capital that Shoulder Innovations Inc. secured through a debt offering will go to further scale the business.
The debt financing with Trinity Capital, a Phoenix, Ariz.-based publicly traded finance company, follows a $42 million Series D equity round that the Grand Rapids-based Shoulder Innovations closed earlier this year that was led by Netherlands-based Gilde Healthcare Partners.
RELATED: Shoulder Innovations Announces Oversubscribed $42 million Series D Financing
The combined funding will accelerate commercialization of orthopedic shoulder implant products for people with traumatic shoulder injuries.
Shoulder Innovations first introduced the InSet Shoulder Replacement in 2016 and has since developed and brought to market a full suite of products and components for the platform, most recently in 2022.
The debt financing from Trinity Capital (which is unrelated to the Livonia-based Catholic health system) gives Shoulder Innovations “flexibility to make additional investments into the team, systems infrastructure and InSet technology to further accelerate the growth and scale of the business,” Chief Operating Officer Matt Ahearn said in a statement.
Until now, the company has “been keeping our foot lightly on the brake from a commercialization standpoint, knowing that it was going to require that full suite of products in order to be successful and fully commercialize all of the products together,” said Shoulder Innovations CEO Rob Ball.
“This now represents resources for us to fully commercialize and or fully scale as a commercial organization and take those products to market in a kind of exciting way,” Ball said.
In the last six months, the company has tripled the size of its inside sales force and doubled the number of independent product representatives, “and we’ll continue to take action like that in the coming quarters,” he said.
Shoulder Innovations produces shoulder implant products through a contract manufacturer in Indiana. To date, orthopedic surgeons have used the company’s products in “thousands” of surgeries, Ball said.
A portfolio company of Grand Rapids-based Genesis Innovation Group, a medical device development firm that Ball and his partners started in 2015, Shoulder Innovations is on track to double sales in 2023 compared to 2022 and is “resourcing ourselves to double again next year,” he said.
Current revenues are “in the tens of millions,” Ball said.
Prior Michigan-based investors in Shoulder Innovations include Genesis Innovation Group’s Cultivate(MD) investment arm, the DeVos family’s Grand Rapids-based Wakestream Ventures, Western Michigan University’s Biosciences research and Commercialization Center in Kalamazoo, Ann Arbor-based Michigan Angel Fund, and Detroit-based Invest Michigan.
Future capital raises “are a function of our growth,” Ball said. “If we continue to clip along at our growth rate that we are, no question we’ll scale at a rate that will require more capital.”
An exit for investors could occur in the future through a sale to a strategic buyer, if the opportunity arises, or by going public, although right now “we’re focused on building a great business,” Ball said.
“We have a lot of headroom from a value production standpoint, and so we’re just focused on building a great business,” he said. “We know that opportunities will present themselves at the right moment in the future.”
