Devices & Diagnostics, Hospitals, Startups

Company providing at-home lymphedema relief raises $10.4 million in Series B round

Tactile Systems Technology, a company that provides at home lymphedema treatment has raised $10.4 million […]

Tactile Systems Technology, a company that provides at home lymphedema treatment has raised $10.4 million in a Series B funding round, the company announced Thursday. Lynphedema is swelling that occurs, mainly in the arms, torso and legs due to fluid retention. It occurs when the lymphatic system fails to drain the liquids that accumulate in the spaces between cells. There are two kinds of lymphedema – congenital, which occurs from birth; and acquired that happens as a result of cancer treatment, trauma, surgery and obesity, among others.

Tactile had around $26.5 million in revenue in 2011 and CEO Jerry Mattys projects 20 percent growth in revenue in 2012. The company is profitable, but Mattys declined to provide more details. Here are the details of the funding:

Industry: Medical devices

Location: Minneapolis, Minnesota

Solution/Product: Flexitouch, the company’s sole product, is a pneumatic compression device that treats lymphedema, chronic edema, and non–healing venous ulcers.

Money raised: $10.4 million in Series B; in 2007, the company raised $12 million in a Series A round of financing.

How it will be used: Part of the money was used to acquire technology that expands Tactile Systems’ capability into other vascular conditions such as venous ulcers, said CEO Jerry Mathys. Mathys declined to talk more about the acquisition saying that he plans launch the product, which has regulatory approval and a reimbursement code, soon. The rest of the money will be used to acquire similar IP rights in the future as well as to fund internal research and development.

Investors: Radius Ventures led the round while existing investor Galen Partners also pariticipated.

Management team: Jerry Mattys, CEO

Market: There are more than 1 million patients who have Lymphedema and 64,000 annually join their ranks, according to the company. People with venous ulcers number around 600,000, Mattys explained. Competitors include makers of pneumatic devices like Bio Compression Systems Inc. and Isreali company Mego Afek.

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