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From Silicon Valley to Baltimore: Opportunity zone lures surgical robot maker and opens new investment

Meredith Cohn, The Baltimore Sun on

Published in Science & Technology News

BALTIMORE -- The robot looks like a stout, little filing cabinet with one long arm, a simple-looking contraption that belies the precision of the brain, ear and throat microsurgeries it is designed to improve.

The company formed to develop and market the machine, Galen Robotics, recently moved to Baltimore from Silicon Valley and might represent the future of safer, less-invasive procedures.

"I like to say it will give the surgeons the effect of power steering," said David Saunders, a company co-founder and chief technology officer.

Galen's move to Pigtown, just west of downtown, also kicks off the city's quest to attract significant private investment to businesses in its many federally designated "opportunity zones," distressed areas that come with a federal tax incentive. Baltimore officials are poised to announce that Galen secured the first such investment in a city business after it moved here and some believe the tax benefit could be a bigger boon to businesses than real estate development that has gotten most of the initial attention.

A College Park, Md.-based venture capital fund recently created to invest in opportunity zone businesses gave an undisclosed sum to Galen, part of about $7 million the company has raised so far from investments, subsidies and tax breaks for job creation.

Galen aims to raise $25 million as it ramps up development of the surgical robot, based on technology developed at Johns Hopkins University, and hire more than 100 engineers and other professionals as it seeks federal approval for its use.

 

Opportunity zones, established by the massive 2017 tax law pushed by President Donald Trump, allow investors to defer or avoid taxes by rolling over investment income into properties or businesses in designated distressed areas.

Ben Seigel, the opportunity zone coordinator at the Baltimore Development Corp., the city's economic development arm, and others expect more money will flow into businesses in the zones than into real estate.

"I do think there is a feeling within the industry and the opportunity zone field over time, if opportunity zones really take off the way we hope they do," Siegel said, "we'll see a lot of investing in operating businesses because generally it's where investors can get bigger returns from growth businesses."

Seigel called Galen "a very positive example and case study."

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