Carlsmed Aims for $103M IPO to Boost AI-Driven Spine Surgery Platform

Carlsmed, a rapidly growing medical technology company specializing in personalized spine surgery solutions, has announced plans for an initial public offering (IPO) targeting up to $103.3 million. The company's move comes amid an uptick in medtech IPO activity and highlights the increasing role of artificial intelligence in healthcare.

AI-Enabled Platform Challenges Traditional Spine Surgery Approaches

Carlsmed's platform integrates AI-enabled software, custom implants, and single-use instruments to address limitations in traditional spine fusion procedures. The company's approach targets a $13.4 billion addressable market by focusing on pre-operative planning, custom-fit interbody implants, and streamlined surgical workflows.

The platform utilizes diagnostic imaging and AI algorithms to develop personalized digital surgical plans and design patient-specific interbody implants. This method aims to improve patient outcomes and reduce healthcare costs by addressing issues such as insufficient pre-operative planning and ill-fitting stock implants.

Promising Clinical Outcomes and Rapid Revenue Growth

Early clinical data suggests Carlsmed's custom devices may offer advantages over traditional stock implants. An interim analysis of 67 adult spinal deformity patients showed a revision surgery rate of just 1.5% due to mechanical complications after a mean follow-up of 14.7 months. This compares favorably to a one-year revision rate of 8.7% observed in a separate study using stock implants.

The company has experienced substantial revenue growth, with sales increasing by almost 100% in 2024 to reach $27.2 million. The first half of 2025 has already seen revenues of approximately $22.2 million, indicating continued strong performance. Carlsmed attributes this growth to expanding its user base, with the number of surgeons using the platform nearly doubling from 103 in March 2024 to 199 by June 2025.

Challenges and Competition in a Growing Market

Despite its rapid growth, Carlsmed faces significant challenges as it scales operations. The company's net loss increased to $24.2 million last year, and its reliance on a limited number of contract manufacturing organizations (CMOs) has impacted margins. Delays in surgical plan approvals and last-minute changes to surgery dates have resulted in costly expedite fees from CMOs, though the company expects these issues to decrease as it refines its processes.

Carlsmed's custom implants compete directly with stock spine implants from industry giants such as Medtronic, Johnson & Johnson, and Globus Medical. While significantly smaller than these established players, Carlsmed's innovative approach and rapid growth trajectory position it as a notable disruptor in the spine surgery market.

As Carlsmed prepares to list on Nasdaq, its performance could influence the broader medtech IPO landscape. The success or failure of companies like Carlsmed may determine whether the current uptick in IPO activity continues, potentially opening the door for a backlog of medtech firms waiting to go public.