Lots of sectors are broken: banking, housing, education, day care and infrastructure. But none of these are as broken as the physical disability space. Fewer than one out of five arm amputees who need prosthetics actually use them. Available prosthetics are too heavy, clumsy and uncomfortable. They’re super expensive. And their functionality is shockingly limited.
It’s an inexcusable state of affairs… not only because limb-different people deserve better, but also because we can make far better prosthetics with today’s technology.
But the more established prosthetic companies have not stepped up to the plate. It took a small high-tech startup called Atom Limbs to build an artificial human arm that is light years ahead of any other prosthetic on the market.
This Technology Dazzles
I’ve never seen anything like Atom Limbs’ prosthetic before. Its nearly full human functionality goes way beyond what I thought was possible. Just like a real arm, it does what your mind tells it to do. Reach, grasp, push, pull, curl, wave and even type or play the piano. The hand not only has a basic sense of touch but also has individual finger movement. And everything is fluid and smooth.
How did Atom Limbs do it? The secret sauce is in how the motor controls activate fluid motion. Here’s how the company explains it…
Movement occurs when a person’s brain sends signals down their spinal cord and into nerves in the corresponding muscle. After limb loss, the nerves are still intact but don’t have anything tangible to control. Using a state-of-the-art bracelet worn around the residual limb to capture and read signals from the wearer’s healthy residual muscles, Atom Touch moves as intuitively as a natural limb… [with the help of] an innovative “apparel-like” attachment system, cuff, and socket.
The company leverages the latest advances in robotic technology plus 15 years of “stealth” research done at the Johns Hopkins University. Those years of development were made possible through a $120 million grant from the Defense Advanced Research Projects Agency (DARPA), a Department of Defense (DOD) agency.
Atom Limbs’ origins as a DOD project have both benefits and drawbacks. The biggest benefit is that $120 million of funding. It’s non-dilutive, which is a great thing. Atom Limbs would cost a lot more today if it was forced to raise that $100 million-plus from investors. On the other hand — like all DOD projects — early versions used absurdly expensive parts and components. And because the project goes back 15 years, the technology became outdated.
Atom Limbs is fixing those drawbacks. In the last 12 months, the company has updated practically everything that goes into the technology: the design, architecture and parts. It’s replacing the ancient but expensive motors, actuators, sensors and other parts with smaller, more functional and much cheaper items. As a result, the company has driven the cost of goods sold way down from $50,000 to $10,000 (and eventually $4,000) with plans to sell its artificial arms for $20,000.
In the meantime, the bulky, nearly useless prosthetic arms of the competition go for around $150,000. Insurance companies cover, at best, a small part of that cost. Based on discussions he’s had with these same insurance companies, Atom Limbs co-founder and CEO Tyler Hayes thinks insurance coverage won’t be a problem for his company’s product.
We can all agree the technology is great, perhaps even revolutionary (an overused word but I definitely think it fits here). It deserves the praise it’s getting from reputable media outlets like CNN (“like something out of space come to Earth”), “60 Minutes” (“amazingly human”) and Quartz (“the most advanced robotic arm in the world”).
I’d even go further. It represents a leap in user experience. It’s similar to the difference between early mobile phones and today’s smartphones. The technology is indeed remarkable and game changing.
But we still need to ask…
Is Atom Limbs investment-worthy?
Upside Far Exceeds Risk
Even if Atom Limbs’ clearly superior technology has the potential to dominate the competition, that doesn’t automatically mean it will. I’ve learned over the years that the best technology and best product don’t always win the race.
That said, Atom Limbs is doing everything in its power to amplify its already sizable technological advantage. Its fourth prototype may look the same, but cost and complexity have been dramatically reduced. It should be the company’s last major iteration, with beta testing planned for early this year and commercialization beginning next year.
This latest version has undergone extensive pre-beta testing. I’d be surprised if it needs anything more than minor tinkering once the beta period is over. And whatever modifications are needed, Atom Limbs has the team to do it. Co-founder Doug Satzger led teams that developed the first iMac and iPhone. Co-founder Eric Monsef led the design work on the original MacBook. Members of the engineering team have worked for Tesla, Apple, Google, HP and other leading tech firms.
These guys know what they’re doing. They’re already planning further improvements, like adding a second ultra-small actuator for enhanced finger movement and control. Adding customization features is also in the works — with plans to customize motor controls for the different degrees and types of muscular damage users have.
Weighing risk against upside, technology is a huge net positive. While barely registering as a risk, Atom Limbs’ potential to dominate the market is very real and not far off. As sizable as the company’s technology moat is right now, it’s going to get much bigger.
Even with a product that should practically sell itself, the company’s marketing risk is worth considering. That’s mostly because it operates in the perversely incentivized healthcare sector. Doctors are a cautious, if not hidebound, lot. New technology is looked upon with suspicion — even when it’s FDA certified (Atom Limbs expects to get 510(k) FDA approval next year). Saving money and time isn’t always top of mind. (It largely depends on whose money and time you’re talking about.)
But here again, the risk isn’t huge. Atom Limbs’ vastly superior prosthetic products give it an unfair competitive and marketing advantage. It’s the company’s market to lose. And I believe the Atom Limbs team is simply too smart and experienced to let that happen.
An Investment Opportunity Swimming in Positives
Upside is huge. Risk is minimal. The technology is game changing. The prosthetics industry is a mess. Competitors won’t be able to keep up. And the team, led by Tyler, is more than capable. Tyler is a moat unto himself. He’s scaled small companies to more than 1 billion users. Atom Limbs is his fourth startup. And, he says, it’s his last one — and the one that he is determined will make the most lasting impact.
As if all of this weren’t already enough, consider Atom Limbs’ valuation in this round. The company has a $40 million cap right now. Given all the company’s positives, that valuation should arguably be 20% to 30% higher. And if all goes according to its thoughtfully calibrated plan, Atom Limbs could easily be worth $80 million to $100 million a year from now. And from there, the sky’s the limit. So in addition to everything else Atom Limbs offers, you’re getting a bargain to boot.
Startup: Atom Limbs
Security type: SAFE
Valuation (cap): $40 million
Minimum investment: $250
Where to invest: Wefunder
Deadline: May 1, 2022
How to Invest
Atom Limbs is raising up to $3.93 million in this round of funding on Wefunder. You’ll need to sign up for an account there if you haven’t yet.
Once you’re signed in to Wefunder, head over to the Atom Limbs raise page. Now enter the amount you want to invest and click the red “Invest” button on the right-hand side of the screen. The minimum investment on this deal is $250.
This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Atom Limbs may need to raise another round of funding in a year, if not sooner.
If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.
All that said, I believe Atom Limbs offers an attractive risk-reward ratio.