At MatchPlay, some of the most interesting investments begin with a deceptively simple question:
Why are we still doing it this way?
KBO Systems started with one of those questions.
Every day, clinicians monitor the heart, oxygen levels, blood pressure and other vital signals during surgery. Yet the organ most directly affected by anesthesia, the brain, is still not monitored comprehensively across the surgical journey.
That gap becomes particularly consequential for older patients.
KBO is building a brain-monitoring platform designed to assess patients before surgery, monitor anesthesia depth during a procedure, and evaluate cognitive recovery afterward. The company's ambition is larger than building a better operating-room monitor. It wants to create a perioperative brain-health platform that follows the patient before, during and after anesthesia.
We invested because we believe KBO sits at the intersection of several characteristics we look for in early-stage companies: a large and under-addressed clinical problem, a differentiated technological approach, a credible path to reimbursement, strong founder-market fit, early clinical validation, and an entry strategy that does not require the company to conquer the entire healthcare system on day one.
Most importantly, we believe the timing matters.
Here is why.
1. The problem is important, growing and still inadequately addressed
Post-operative cognitive complications are not a niche problem.
KBO's research highlights the incidence and economic burden of delirium and other neurological complications following surgery in older patients. The company estimates that one in three surgical patients over 65 experiences brain complications after surgery and points to a substantial cost burden associated with these complications. It also highlights a fundamental monitoring gap: the brain is generally not continuously assessed across the complete perioperative journey.
The demographic direction makes this increasingly important.
More people are living longer. More elderly patients are undergoing procedures that historically may not have been considered for patients of their age. KBO's thesis is that the surgical population over 65 will expand materially over the coming decades, increasing the clinical and economic consequences of perioperative cognitive complications.
From an investment perspective, this matters.
Great healthcare companies are rarely created simply because a new sensor becomes available. They are created when technology intersects with a clinical problem that is becoming impossible for the system to ignore.
We believe perioperative brain health may be approaching that point.
2. KBO is not simply building another anesthesia monitor
There are already established anesthesia-depth monitoring products in hospitals.
If KBO were merely building a newer version of an existing monitor, the investment case would be considerably less interesting.
The company's architecture is different.
KBO combines EEG signals with auditory evoked potentials and software algorithms to evaluate the patient's brain across three stages:
- Before surgery: establish a cognitive baseline and assess brain health.
- During surgery: monitor anesthesia depth and help determine whether the appropriate level of medication is being administered.
- After surgery: assess whether cognitive recovery has occurred and identify potential complications before discharge.
The underlying product is envisioned as a combination of software as a medical device, EEG and auditory sensors, and a hardware monitoring system.
That creates a fundamentally more interesting proposition than a point solution.
The long-term opportunity is not "a better number on an operating-room monitor," but rather an operating system for perioperative brain health.
3. The strongest part of the thesis may be the business model, not the technology
One of the most important lessons in medical-device investing is that clinical usefulness alone does not guarantee adoption.
A hospital can believe that a technology improves care and still decide not to purchase it.
Why?
Because healthcare procurement is ultimately governed by economics.
This is where KBO caught our attention.
Existing anesthesia-depth monitors are typically an expense to the healthcare provider. KBO's strategy is designed around existing CPT reimbursement pathways that could make portions of its workflow billable.
The company has identified five existing codes that it believes can support different parts of the KBO workflow, including behavioral screening, automated neuropsychological testing, test administration, neuropsychological evaluation and dental sedation evaluation.
That distinction is critical.
Most medical devices ask a hospital CFO: "Will you spend money to improve this clinical outcome?"
KBO ultimately wants to create a different conversation: "Can this technology improve patient outcomes while also creating a reimbursable clinical workflow?"
That transition from cost center to potential revenue-generating workflow could materially alter the adoption equation.
We believe that is one of the most important parts of the KBO investment thesis.
Of course, reimbursement is complex and code availability does not automatically guarantee reimbursement in every circumstance. Execution will depend on regulatory clearance, coding applicability, payer policies, clinical workflow and provider adoption.
But building reimbursement into the commercial strategy from the beginning is very different from trying to solve monetization after a device reaches the market.
4. KBO has found a smart wedge into a difficult market
Selling into hospitals is hard.
Selling a new medical device into hospitals is harder.
Selling a new category of medical device into hospitals is harder still.
KBO's go-to-market strategy acknowledges that reality.
Rather than beginning with a broad hospital deployment, the company's planned V1 focuses initially on dental and procedural sedation environments, including dental and oral-maxillofacial surgery settings, GI procedures and ambulatory surgery centers. The company then plans to expand toward broader hospital applications across pre-op, the operating room, ICU and PACU environments.
We like this sequencing.
Early-stage companies often confuse the size of the eventual market with the correct place to begin selling.
They are not the same thing.
The best initial market is frequently the one where purchasing friction is lower, the value proposition is easiest to understand and customers can adopt without years of institutional negotiation.
If KBO can establish clinical utility, workflow integration and reimbursement within procedural settings, those deployments could become proof points for larger hospital systems.
That is a much more credible commercialization path than attempting a system-wide hospital rollout from day one.
5. There is already evidence behind the science
Deep-tech and healthcare investments require a different threshold of diligence.
A compelling presentation is not enough. Ultimately, biology, physics and clinical data get the final vote.
KBO is already conducting IRB-approved clinical studies at UC Davis and McLeod Health. Its current clinical validation program targets approximately 400 patients across two sites and is designed to generate a proprietary dataset for validating its algorithms.
The company's early findings indicate that auditory evoked potential signals change with sedation depth. KBO is also developing a broader EEG and auditory-stimulus pipeline intended to establish individualized pre-operative baselines, monitor anesthesia intra-operatively and evaluate post-anesthesia recovery trajectories.
For us, this was significant for two reasons.
First, KBO is not starting with a theoretical AI model and then searching for clinical data.
It is building the dataset alongside clinicians.
Second, the dataset itself can become strategically valuable.
Healthcare AI defensibility often comes less from the algorithm alone and more from access to proprietary, correctly labeled clinical datasets that competitors cannot easily reproduce.
If KBO succeeds in building a longitudinal dataset spanning pre-op, intra-op and post-op brain states, that data could become an important part of its moat.
6. The regulatory strategy is staged rather than binary
Another attractive aspect of KBO's plan is that the regulatory strategy mirrors the product strategy.
The company plans to begin with a V1 EEG and AI anesthesia-depth monitor and pursue a 510(k) pathway using existing anesthesia monitoring devices as predicates. Its roadmap then calls for expanding the cleared hardware into additional cognitive and delirium applications, with future indications potentially following a De Novo pathway.
This matters because regulatory risk is one of the largest value inflection points in medical-device companies.
KBO is not attempting to obtain approval for its entire long-term vision in one regulatory leap.
Its proposed architecture allows the company to clear a narrower initial product, establish commercial deployments and subsequently add software-driven capabilities to the same platform.
That creates a series of milestones investors can underwrite.
- Research platform.
- Bench prototype.
- Clinical prototype.
- Commercial device.
- Additional software capabilities.
- Additional indications.
- Full perioperative platform.
Each milestone reduces a different category of risk.
That is exactly what early-stage capital should accomplish.
7. The company is building toward multiple layers of recurring revenue
Another part of the thesis we found compelling is the potential revenue architecture.
KBO's current model combines:
- hardware monitors
- disposable sensors and consumables
- software modules
- reimbursement-supported clinical workflows
The company's deck currently models approximately $5,000 per monitor, recurring disposable sensor revenue and high-margin software modules. Its financial projections envision revenue scaling from approximately $0.8 million in Year 1 to $49.6 million by Year 5, although these figures remain forward-looking company projections rather than guaranteed outcomes.
The exact projections will inevitably evolve.
What matters more to us is the structure.
Hardware creates the installed base.
Consumables create recurring procedure-level revenue.
Software creates higher-margin expansion opportunities.
New clinical indications increase the economic value of the same installed platform.
That is a considerably more attractive model than a one-time equipment sale.
8. Founder-market fit is unusually strong
We spend significant time evaluating markets.
But at the earliest stages, we spend even more time evaluating whether the people building the company are unusually suited to solving the problem.
KBO stood out here.
Founder and CEO Kevin Goehl brings more than a decade of experience navigating hospital systems and has worked across medical technology companies including Medtronic, Philips and Stryker.
Dr. Nate Weitzel, Chair of Anesthesiology at UC Davis, brings clinical leadership and access to the environment in which the technology ultimately needs to work.
Dr. Zhibin Zhou combines anesthesiology, cognitive neuroscience, EEG, auditory evoked potentials and machine learning expertise.
The wider team includes expertise spanning clinical trials, FDA regulation, intellectual property, reimbursement and anesthesia operations.
This combination matters.
Medical-device companies frequently fail because they have one half of the equation but not the other.
They may have exceptional scientists who have never commercialized a product.
Or experienced commercial operators selling technology without sufficiently differentiated science.
KBO is assembling both.
That materially influenced our conviction.
9. The capital is tied to identifiable value-creation milestones
At seed stage, one of our biggest questions is always:
What specifically does the next dollar of capital de-risk?
KBO has laid out a 30-month roadmap leading toward FDA clearance, with approximately $4.9 million of projected funding across two rounds.
The plan moves through four major phases: regulatory groundwork, clinical preparation and verification and validation, multi-site clinical validation, and regulatory submission and pilot installations.
Its current first round targets $2 million and is expected to fund clinical validation, prototype development, regulatory preparation, FDA interactions and team expansion.
We like companies where financing rounds correspond to measurable changes in company value.
In KBO's case, those value inflection points are tangible:
- clinical data
- prototype performance
- regulatory alignment
- peer-reviewed evidence
- FDA submission
- clearance
- commercial pilots
That makes the financing strategy easier to evaluate than a plan where capital simply funds another 18 months of operating expenses.
10. The competitive whitespace is meaningful
The current category includes major companies and well-known monitoring systems such as Medtronic BIS and Masimo SedLine.
KBO's own competitive analysis argues that most existing technologies remain focused on the operating room and primarily rely on conventional frontal EEG approaches.
KBO intends to differentiate through multi-region EEG, auditory signals, machine-learning-based interpretation, drug-aware monitoring, cognitive and delirium applications, procedural sedation use cases and reimbursement pathways.
Incumbents obviously have advantages.
They have distribution.
They have hospital relationships.
They have regulatory experience.
They have installed bases.
But incumbency can also create inertia.
Large medical-device companies frequently optimize existing categories rather than redefining them.
Startups become interesting when they can change the architecture of the category itself.
KBO's opportunity is not simply to compete for share within anesthesia-depth monitoring.
It is to expand the definition of what brain monitoring during surgery should include.
Why invest now?
Every early-stage investment contains unanswered questions.
KBO still needs to complete substantial clinical validation.
It needs to build the commercial device.
It needs to navigate FDA clearance.
It needs to validate its reimbursement assumptions in real-world environments.
It needs to prove that clinicians will integrate the technology into their workflows.
And eventually, it needs to prove that better brain monitoring translates into meaningful clinical and economic outcomes.
Those are not small execution risks.
But venture investing is not about waiting until every risk disappears.
By the time the clinical evidence is complete, regulatory clearance has been obtained, reimbursement has been validated and customers are purchasing at scale, the nature and valuation of the opportunity will be very different.
Our job is to determine whether there is enough evidence today to justify taking the remaining risk.
With KBO, we believe there is.
Clinical studies are underway.
The initial technology is being tested on real operating-room data.
The product roadmap is defined.
The regulatory strategy is taking shape.
The commercialization team understands the market.
The reimbursement opportunity has been considered from the beginning.
And the company is targeting a problem whose importance is likely to increase rather than diminish over the coming decades.
That combination created the moment for us to invest.
What KBO represents for MatchPlay
There is also a broader reason we wanted to partner with KBO.
We want MatchPlay to be the kind of investor founders approach when they are tackling markets that are difficult precisely because they matter.
We are interested in businesses where there is genuine technical or operational complexity.
Where distribution matters as much as product.
Where domain knowledge creates an advantage.
Where solving the problem requires patience.
And where the market may look obvious in hindsight but non-obvious at the moment the company is being built.
KBO fits that profile.
The company is attempting to build something ambitious: a platform capable of making brain assessment a routine part of perioperative care.
If that vision succeeds, the question several years from now may no longer be:
Why should we monitor the brain during anesthesia?
It may instead be:
Why did we ever perform millions of procedures without doing it?
That is the kind of question we like investing behind.