Tern puts another £1.1m into surgery simulation tech firm FundamentalVR

Technology investment company Tern has made a further £1.1m investment in FVRVS - trading as FundamentalVR - a virtual reality (VR) training and data analysis technology platform, and one of its existing portfolio companies.

The AIM-traded firm said Fundamental's platform combined immersive virtual reality with haptics - the sense of touch - to create low-cost and scalable “flight simulator” experiences, which offered a new way to facilitate skills development for surgeons.

It said the additional investment increased its holding in FundamentalVR from 18.3% to 34.7%.

The investment followed Fundamental's recent signing of a three-year term joint development agreement with the Mayo Foundation for Medical Education and Research - the US-based academic medical centre - which would see the two parties collaborating on a range of simulation and education products, with an initial focus on the general surgery area.

Additionally, the current release of the ‘Fundamental Surgery’ platform was now live in the Mayo Clinic's simulation centres located in Arizona, Florida and Minnesota.

Tern said the new alliance was expected to accelerate FundamentalVR's progress in building out its procedures portfolio, and enable its team to have access to leading surgical knowledge as well as 3D modelling, data scientists and simulation specialists at the Mayo Clinic.

The Mayo Clinic and FundamentalVR were said to both be ultimately focused on improving patient outcomes, and shared the belief that the comparative data insight and measurement collected and available through the FundamentalVR platform would have a “profoundly positive” impact on medical outcomes and products around the world.

Under the joint development agreement, the Mayo Clinic would receive royalties on the sale of jointly-developed licensed products, and would receive other consideration from FundamentalVR upon achieving certain milestones.

FundamentalVR's current revenues from its existing procedures and its pipeline of new procedures were expected to accelerate through the addition of new procedures and potential licencing areas emanating from the new partnership.

Additionally, Tern explained that in the longer term, FundamentalVR expected to build additional revenue sources from its data insight, accreditation and licensing of the development assets in complementary medical markets.

Based on FundamentalVR's latest statutory accounts for the year ended 31 December 2017, it had net assets of £0.89m and a loss for the year of £0.25m.

“FundamentalVR has proven its agility to rapidly deliver on its strategy since our initial investment,” said Tern chief executive officer Al Sisto.

“We are really pleased to provide this follow-on investment in this innovative company.”

Sisto said FundamentalVR had an “ambitious” strategy, forward revenue visibility, and now a “prestigious” content partner that recognised the ability of the platform to “revolutionise” surgical training and patient outcomes.

“We are pleased with their execution and the value it is creating in the business and therefore delighted to have increased our ownership position.”