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Virti: The investment journey of a start-up

Digital training start-up Virti has gone from an idea to a highly successful reality in the space of three years. Investment Monitor tracks this journey and looks at the role investment has played.

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Start-up Virti’s education platform is used for medical training under the watchful eye of founder Dr Alex Young. (Photo courtesy of Virti)

For digital training start-up Virti, being named one of Time magazine’s best 100 inventions of 2020 is a rewarding measure of what the company has achieved just two years from launch, especially considering that conventional wisdom dictates that 90% of start-ups will fail. However, too often the successful path from brilliant idea to realised business outcome becomes oversimplified by the Silicon Valley rags to riches narrative. Instead, the route to start-up success is often financially bumpy and littered with difficult decisions. Let’s call it the investment journey of a start-up…

Rewind to the beginning: founder Dr Alex Young’s hope was to change the way surgeons are trained using a virtual reality platform to provide an experiential training environment from a mobile device or immersive headset. Surgeons become more skilled with practice, and with the scalable, repetitive and immersive practice that the Virti platform provides, it becomes possible to harvest objective data-driven insights on employee performance at scale as well as remotely.

A remote platform just in time for Covid-19

Even before the pandemic hit, Young and his colleagues realised in-person training just wasn’t scalable. The Covid-19 crisis has since thrown the problem into stark relief. Young happened to be in Los Angeles at Cedars Sinai Hospital when the pandemic hit. He was able to put into practice what Virti could do by showing how staff could be trained at scale on an emergency basis to contend with the healthcare requirements of the crisis. And in April 2020, Virti launched a number of Covid-19 training modules on its platform.

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Young was still training as a trauma and orthopaedic surgeon working for the NHS in the UK when he presented his idea for Virti at the 2017 Virtual Reality World Congress in Bristol. His idea piqued the interest of global investors gathered at the event. “From day one we always wanted to be a UK company, but the bigger market for us in terms of healthcare training was always going to be the US,” he says.

In late 2017, with initial pre-seed funding from Silicon Valley-based venture capital firm Boost VC, part of the Draper Investment Network, Young left the NHS in Bristol and relocated to San Mateo in California’s Silicon Valley with Nils Hellberg, Virti’s chief technology officer, and computer scientist Lukas Roper. “It was so much fun,” says Young of this period spent building the deep technology, AI-focused analytics platform.

The benefit of working in Silicon Valley’s cutting-edge tech ecosystem was that Young was at the epicentre of the developing field of virtual and augmented reality. “Being in Silicon Valley gave us a much better idea of how fast the technology was moving. Everything was changing from week to week,” he says. Another benefit of being in the US was the way failing is viewed as a rite of passage in start-up culture. The stakes were high for Young as he had left his medical career on the verge of completing his training. However, the give-it-a-go culture, which fired his enthusiasm, and the sheer fun of building his own business meant it never felt that way.

Launching Virti in the UK

In 2018 came the decision to bring the company back to the UK for launch. “Building the platform in the US then coming back to the UK allowed us to have a much more global focus and a bigger vision from day one,” says Young. He chose to base Virti in Bristol instead of the UK’s leading start-up hubs, such as London and Cambridge. His links to the city where Virti first started made it feel like the right choice as well as what he describes as its ‘west coast’ feel.

However, most importantly the city has a tech talent pool that would have cost ten times as much in Silicon Valley or even London, where the competition for skilled employees is fierce. Virti’s lead virtual reality developer Lukas has been nominated for an Academy award for a VR game he worked on, and Young describes the rest of the tech team in Bristol as “phenomenal” and on a par with any other tech hub in the world. While business development and operations functions might be built in sales markets, the tech and product team will remain in Bristol, says Young.

After being chosen to be part of an NHS innovation programme where the team really got to refine the product, Virti won a $2m seed round of investment in April 2019, part of which originated from Los Angeles’s Cedars Sinai Hospital. Cedars Sinai started out as a customer before deciding to invest along with a fund of high-net-worth individuals in London. The funding enabled the company to build out a sales team and patent more of the analytics technology.

Setting sights on the US market

With his sights set on the US market and looking towards the US once again, Young targeted possibly the biggest healthcare provider on the planet, the Texas Medical Centre in Houston. “It is like a small city filled with hospitals,” he says. Although the core tech team remained in Bristol, Virti established a Texas sales team in May 2019 to reflect the market opportunity.

Young says, so far, the time zones and logistics of having a tech team based in the UK seem to work well. “We are scaling out our sales team across the US and also looking to Asia-Pacific and the United Arab Emirates [UAE] as well.” Although sales can be done over Zoom or similar online meeting providers these days, Young concedes that business needs around the world differ. Taking the UAE as an example, he says a local sales office would most likely be on the cards, but for now, the focus in on the US market.

As well as geographic expansion, Young has applied the Silicon Valley growth mindset to his UK business by planning expansion into other sectors including gas and aviation, or any corporate with training needs, he says. Along with this he is raising investor funding to accompany the incredible growth the company has seen over the past year. “Revenue wise we have grown about 1,000% since last year,” he says. Along with an impressive array of industry awards and investor confidence, all indications are that Virti will not be a start-up for much longer. That element of its journey to fully fledged international company will just be part of a bigger story.

Lara Williams

Lara Williams

Senior reporter

Lara Williams is a senior reporter at Investment Monitor specialising in FDI in the tech and bio-pharma sectors.