Due to significantly increased customer interest in Medicalgorithmics’ proprietary solutions, the company (a medtech listed on the Warsaw Stock Exchange) and its largest shareholder, BioFund Capital Management LLC, have decided to make an additional investment in R&D and development teams. This move addresses the rising demand for the company’s products, enhance integration capabilities, accelerate the onboarding of new clients, and intensify customer acquisitions for testing its leading AI-driven software. Medicalgorithmics and BioFund have signed an agreement for additional financing of up to $2.4 million, increasing the total loan value to $5.4 million. It should enable the company to execute its current expansion strategy in addition to achieving profitability in 2026.
The new loan agreement expands upon the $3 million financing deal signed on November 29, 2024. At the same time, the interest rate on this additional financing has been lowered—the new loan will bear a fixed interest rate of 14%.
“The consistent execution of our strategy is yielding results. We have recently obtained certifications for our latest products, the DRP platform, and DRAI AI algorithms. Moreover, the excellence of our technology was confirmed by a prestigious publication in Nature Medicine, which described our AI algorithms as a leading solution in an international scientific study. This global recognition has significantly increased the number of partners interested in working with us. We have accelerated contract signings in new markets, including a major contract in the U.S. in January of this year. Our partner is now looking to expand its use of the DeepRhythmPlatform (DRP) and DeepRhythmAI (DRAI). As a result, we will scale up cooperation, strengthen customer engagement, and increase revenue over the next three years,” said Maciej Gamrot, CFO of Medicalgorithmics.
Medicalgorithmics is significantly accelerating its customer acquisition efforts. In the second half of January, the company signed a contract with a U.S.-based IDTF, with estimated revenue potential of PLN 46 million within the first two years of integration. This followed the recognition of its AI algorithms as delivering top-tier results in the prestigious Drai Martini study, published in Nature Medicine.
“We are at a breakthrough moment – Medicalgorithmics now holds a significant technological advantage even over the largest industry players. No other company offers such advanced AI algorithms, recently certified in both the U.S. (FDA) and Europe (CE), alongside cutting-edge ECG analysis software. That’s why we have decided to leverage our strengths for global expansion and ‘strike while the iron is hot.’ Faced with a choice between improving short-term financial results at the cost of limiting business growth in the coming years, we – together with our key shareholder BioFund – have opted to increase our investments in development teams and expand implementation scopes across multiple projects. This also applies to our largest U.S. client, which has decided to significantly broaden its collaboration with us. As a result, we need to scale our resources and teams accordingly.
We aim to fully capitalize on the unique growth opportunities we have created through the successful execution of our new strategy. BioFund’s financing allows us to start immediately and execute our projects as efficiently as possible, strengthening the company’s market position. While our increased commitment over the coming months will slightly delay our cash flow breakeven point, we expect a massive market share increase, higher testing volumes, and greater company valuation, leading to even better-than-anticipated results by 2026,” added Maciej Gamrot.
The additional BioFund loan will be disbursed in four tranches by October 2025. The loan is secured by a standard company statement of voluntary submission to enforcement.
According to its current strategy, Medicalgorithmics is focusing on selling high-margin diagnostic software, while device sales remain an optional offer for clients. In Q3 2024, service revenue reached PLN 5.2 million, with U.S. market revenue growing 24% quarter-over-quarter, reaching PLN 1.2 million. This represents a 53% recovery compared to Q4 2023 revenue. Since adopting its new growth strategy, the company has acquired 18 new clients.