Outset Medical Secures $132 Million in Series D Funding to Advance Home Dialysis Innovation

VCBeat (WeChat: vcbeat)Learned: Innovative Hemodialysis System CompanyOutset MedicalAnnounced the completion of a $132 million Series D financing round. Following this round, Outset Medical’s total fundraising has exceeded $320 million, making it one of the best-capitalized private medical technology companies in Silicon Valley.

This round of financing was led by new investor Mubadala Investment Company, a leading investment firm based in Abu Dhabi with active operations in more than 30 countries and regions worldwide. Existing investors Baxter Ventures, Baxter International Venture Capital, Fidelity Management & Research Company LLC, and Perceptive Advisors also participated in this round.

Outset Medical's Historical Financing Rounds (Data Source: Crunchbase)

The company will use the proceeds from the financing to increase production capacity and accelerate the commercial expansion of its Tablo hemodialysis system in the U.S. acute and chronic care markets.

Headquartered in San Jose, California, the company develops and manufactures the Tablo hemodialysis system, an integrated dialysis machine designed for water purification and dialysate production, suitable for use in a variety of settings.

Hemodialysis machines are bulky and expensive, with little change over the decades. However, Outset Medical has been dedicated to upgrading this technology so that patients can one day receive life-saving treatment at home rather than in a hospital. The Tablo Hemodialysis System is more compact than traditional dialysis machines and is designed to reduce the cost and complexity of dialysis, expanding how, when, and where dialysis can be administered.

Dialysis services are provided several times a week to more than 500,000 patients in the United States to remove waste products and excess fluid from individuals with kidney failure. Although more than 91 million dialysis treatments are performed annually in the U.S., at an estimated annual cost of $65 billion, there has been little meaningful innovation in technology or service models over the past few decades.

Tablo aims to transform this seemingly “stagnant” dialysis landscape. Its real-time water purification and dialysate production are integrated into a compact system, functioning like a dialysis clinic on wheels.

Outset’s technology combines software and sensors to automate the manual steps typically required to start up and operate the machine. It also purifies water and generates dialysate (a fluid used in dialysis) in real time. The system requires only an electrical outlet and a water source to operate, freeing providers from reliance on costly clinic infrastructure and enabling on-demand, cost-effective dialysis across diverse care settings. Designed with end-user simplicity in mind, its appearance and feel resemble those of an intuitive consumer product. Wireless data connectivity, sensor-based automation, and an animated touchscreen make Tablo easier to learn and more convenient for both healthcare professionals and patients.

On the left is Outset’s device, compared with the traditional dialysis equipment on the right (Image source: CNBC)

All treatment data it collects are shared on the company’s cloud, making it an attractive technology and medical device company.

Leslie Trigg, the company’s CEO, stated that even before joining Outset, she had recognized that healthcare is more than just a $3 trillion market. In fact, it is a collection of opportunities worth millions and billions of dollars, with renal dialysis services encompassing software, hardware, and service components.

By 2022, the market value alone is projected to reach $22.8 billion. In the United States alone, nearly 500,000 people are dialysis patients, and this number is expected to grow as the population ages. According to data from the National Kidney Foundation, more than 2 million people worldwide are undergoing dialysis.

In a phone interview, Trigg said, “I realized in my first week at Outset that this was a huge niche in the healthcare market.” Trigg previously served as an executive-in-residence at the investment firm Warburg Pincus. She noted, “Nurses are still pushing these massive machines around hospitals.” The company has shrunk the bulky dialysis machine down to a 37-inch unit for dialysis clinics that can be plugged into any faucet, primarily offering on-demand, self-service treatment. Trigg likes to think of it as the “Tesla of kidney dialysis,” drawing an analogy to how Elon Musk’s company redefined the automobile.

Leslie Trigg, CEO of Outset Medical

“Tablo offers patients and healthcare providers a new option, delivering more flexible and convenient dialysis treatment, improving the dialysis experience, while reducing overall dialysis costs,” said Leslie Trigg, CEO of Outset Medical. “We thank our investors for the opportunity to make a significant impact on the future of dialysis care.”

Camilla Macapili Languille, Senior Vice President of Pharmaceuticals and Healthcare Technology at Mubadala, stated, “Our investment in Outset Medical presents an exciting opportunity for Mubadala, as it aligns with our goal of improving people’s lives while meeting the demands of key global markets. We selected Outset Medical as our first private healthcare technology investment in the United States because Tablo can significantly enhance dialysis care worldwide and address one of the largest areas of global healthcare spending through highly disruptive and innovative technology.”

Currently, federal regulators have approved its technology, named “Tablo,” for use in medical clinics and hospitals. Clinical trials are currently underway to test whether it can also be used by patients at home. Trigg stated that the company is also interested in expanding into retail environments, skilled nursing facilities, and urgent care offices.

Outset Medical, based in Silicon Valley, is dedicated to innovating technology-driven service models with the aim of reducing costs and transforming the patient care experience. Outset’s Tablo system, which carries CE marking and FDA clearance, is suitable for use in both acute and chronic care settings. In addition to its commercial expansion in acute and chronic care, the company is conducting a clinical trial to expand the indicated uses of Tablo to include home-based treatment.