What we think about Vicarious Surgical (RBOT)
To be clear, Vicarious Surgical is a Very High Risk, pre-revenue, recently public small-cap stock (arguably microcap, depending on your definition, with its market capitalization of just over $450 million as of this writing). It’s burning cash at a steady pace as it moves along its expected roadmap to commercialization (more on that below), and I expect it to continue to be extraordinarily volatile. But if Vicarious’ journey progresses as planned — and assuming the company isn’t acquired by a larger competitor first (note Mazor, Mako, and Monarch were each acquired by their current respective owners above) — I believe the sky is truly the limit for this innovative business.
More specifically, Vicarious’ goals are “revolutionizing robotic surgery — and making it accessible.” Its stated vision is “to design a surgical robot that enables surgeons to perform minimally invasive surgery with 3D visualization and accurate control.”
That’s all well and good, but it also raises the question: “Don’t existing robot surgery platforms already do that?”
Well, yes and no.
First, consider what Vicarious describes as the less-than-ideal state of surgery today given a combination of manual and robotic procedures. Legacy robotic surgery platforms have certainly improved complication and injury rates. But given their shortfalls, open surgery still comprises the majority of all procedures performed:
As I alluded earlier, today’s legacy robot surgery platforms also leave much to be desired. They’re physically large — sometimes even requiring hospitals perform physical construction projects to accommodate their size. Existing single-port platforms are also limited in their capabilities and scope of procedures. They’re incredibly expensive as well — not only from the perspective of upfront capital investment required, but also as it pertains to the disposable/sterile parts of each robot that drive recurring revenue for the platform provider.
Source: Vicarious Surgical investor presentation
So, Vicarious Surgical’s co-founders developed a new platform entirely in stealth — a secretive approach often taken by disruptive startups when designing something new and truly unique — exiting stealth mode in April 2018 with a $17 million series A funding round. Its early investors include Khosla Ventures, Innovation Endeavors, Gates Ventures (run by Bill Gates), AME Cloud Ventures, E15 VC, and Salesforce Co-CEO and Co-Founder Marc Benioff.
Moreover, in July 2022 Vicarious announced “Center of Excellence” agreements with fellow 7investing recommendation HCA Healthcare (182 hospitals) and University Hospitals Ventures (over 20 hospitals, 50 health centers, and 200 physician offices in Ohio) to provide user input through their system physicians as the company advances the design of its platform.
So, what attracted the attention of these heavy hitters in the venture capital and hospital system worlds, you ask?
Inspired by the movie Fantastic Voyage, in which doctors shrink down in size to travel within the human body, Vicarious created an entirely separate robotic architecture design and actuators. The end result was a robotic platform designed to address legacy systems’ shortcomings by acting as an extension of the surgeon’s own upper body — fully replicating the movement of their wrists, elbows, and shoulders through a single incision smaller than the size of a dime.
It’s also a physically smaller system (34″ wide, able to fit through most doors), is cheaper (roughly half the price of existing topline robots with an expected price of $1.2 million, and with five to 10X lower ongoing capital costs), and down the road should enable surgeons to effectively perform a bevy of single-port abdominal surgical procedures.