Outset Medical Secures $76.5M Series C Funding to Advance Home Dialysis with Tablo System

VCBeat has learned that Outset Medical, a California-based startup in the kidney dialysis sector founded in 2003, recently secured $76.5 million in Series C financing, bringing its total equity fundraising to nearly $200 million since its inception.

This round of financing was led by T. Rowe Price Associates, with participation from previous investors Fidelity Management & Research Company, Partner Fund Management LP, Warburg Pincus, Perceptive Advisors, and The Vertical Group.

Outset Medical's Financing History

The company will use the proceeds from this financing round to expand its manufacturing operations, grow its sales and support teams, and conduct additional clinical trials. Currently, the product requires further testing to obtain FDA approval for home use.

Outset focuses on innovative products and services for kidney dialysis, providing patients with renal failure a new method for artificial blood purification. The company’s flagship product is the Tablo™ dialysis system, the first new dialysis system to enter the U.S. market in 15 years. Integrating features such as wireless connectivity and real-time purification, the system stands 35 inches tall and significantly streamlines the dialysis process, potentially eliminating certain tasks previously performed by dialysis staff.

Visually, Tablo is distinctly different from traditional bulky dialysis machines. Moreover, unlike conventional dialysis systems that require purified water, Tablo can draw in tap water and purify it in real time during the dialysis process. By eliminating the need for centralized water treatment equipment, Tablo enhances dialysis efficiency and reduces hospital costs.

Tablo Dialysis Machine: Compact Size, Easy to Operate

Tablo is easy to operate, featuring a touchscreen that displays usage instructions, patient education, and entertainment content. With automated sensors, wireless data transmission, and a simple touchscreen interface, Tablo functions more like a consumer product than a medical device.

Additionally, Outset Medical offers two mobile applications to enhance the user experience: a patient training app and a documentation app that contains all device-related documents. A third patient-facing application is currently under development.

Outset’s dialysis machine, which features bidirectional data communication capabilities, has received FDA clearance. Trigg, the company’s CEO, stated, “We are developing a patient application that will transmit treatment data from Tablo to the cloud and then relay it back to the patient. Currently, patients receive no information about their treatment at all—for instance, whether all toxins have been removed in the correct proportions and quantities. Patients should have the right to know this information. Our goal is to provide patients with ample information so they can take control of their own health.”

In a nutshell, Outset Medical strives to eliminate the cumbersome aspects of dialysis.

“For a simple example, one of the most critical steps in dialysis is ensuring that there are no air bubbles in the dialyzer,” said Trigg. “Currently, air removal relies on technicians tapping the dialyzer against the side of the machine. We have developed a proprietary algorithm that automatically removes air from the dialyzer and blood circuit. By focusing on automation in dialysis and simplifying procedures, we have been able to eliminate more than 50% of the steps.”

For patients with kidney disease, dialysis requires visiting a clinic two to three times per week, with each session lasting approximately five hours and incurring high costs. If patients could operate the dialysis machines themselves, it would provide an unprecedented dialysis experience for countless individuals with kidney disease.

Clearly, Outset’s ultimate goal with this simplified approach is to enable patients to perform dialysis treatments themselves. However, Outset still requires FDA approval before the device can be used in patients’ homes. Meanwhile, the company has already deployed its “clinical self-care” product in certain dialysis clinics, akin to self-checkout kiosks in grocery stores, allowing patients to independently set up and monitor their treatments without relying on clinic staff.

Currently, Outset provides dialysis services to more than 500,000 patients in the United States each week. There are over 78 million dialysis treatments performed annually in the U.S., with a market size estimated at $42 billion; however, there has been little innovation in dialysis technology or service models over the past few decades.

Company CEO Trigg believes that the dialysis industry remains stuck at the level of 30 years ago. First, it is largely still a segment dominated by pen-and-paper records. Second, there has been no genuine technological transformation for such a long time.

The founding team of Outset boasts extensive medical backgrounds.

“We aim to fundamentally disrupt the service model of dialysis, eliminating the need for patients to visit dialysis clinics altogether. Like diabetes, kidney disease involves a highly complex management process; only through innovative product design that streamlines workflows can we deliver a superior consumer experience. A focus on patient experience is at the very core of Tabla. Currently, our dialysis machine features a graphical user interface that leverages extensive images, videos, and simple animations to guide users through operation, thereby removing the need to memorize any cumbersome procedural steps.”

The company’s team possesses extensive medical industry expertise. Chief Executive Officer Leslie Trigg earned her undergraduate degree from Northwestern University and an MBA from the Haas School of Business at the University of California, Berkeley. Prior to joining Outset, she served as Executive Vice President at Lutonix, a cardiovascular medical device company acquired by CR Bard. She previously held key leadership positions at Access Closure, a vascular closure systems company, and FoxHollow Technologies. Ms. Trigg’s management experience also includes roles at Cytyc Corporation (acquired by Cytyc) and Pro-Duct Health, a breast cancer diagnostics company. The team has deep-rooted medical industry backgrounds.

Other founding team members include Jeff Mack, the inaugural Chief Financial Officer, who previously served as CFO of Sonitus Medical Inc., a venture capital-backed medical device company. Luis Alvarez, MD, PhD, the Chief Medical Officer, is Director of the Biodesign Program at Stanford University and an expert in nephrology.