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Paragon 28

Orthopedic foot and ankle company
Medium risk

Estimated revenue in 2018-2019

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Investment Idea Details
About the company

Paragon 28 was established in 2010 as an orthopedic foot and ankle company in Englewood, Colorado. The name “Paragon 28” was chosen to show that it is exclusively a foot and ankle company, with the “28” representing the number of bones in the foot.

Over 100 000 surgeries have been supported by Paragon 28 products to date as of November 2020, up from 33 000 as of Q2 2017. The company has issued 175 patents and has developed over 3000 individual products and 50 product families. In addition to the core US market, Paragon 28 distributes its products in more than 20 countries.

Market Opportunities

The size of the global foot and ankle devices market is expected to reach $8B by the end of 2025 from $5.3B in 2020. The market is growing at a CAGR of 7.5%. Increasing ageing population, the growing incidence rate of fractures, bone-joint problems, bunions, foot ulcers and arthritis are the factors that surge up the market growth.

Since its inception, Paragon 28 has obsessed over every aspect of foot and ankle surgery. Committed to creating tailored solutions to improve surgical outcomes, Paragon 28 has launched innovative products and instrumentation that help to streamline procedures, allow surgeons flexibility in technique and approach, and facilitate reproducible results benefiting both the surgeon and patient.


Wright Medical, a direct competitor of Paragon 28, filed a lawsuit against Paragon 28 in federal court in Colorado, alleging violations of the Lanham Act as well as state law false advertising claims. The motion still remains pending. The unfavorable outcome of this lawsuit for Paragon could negatively impact the operating results of the company.

The risk of intense competition. Wright Medical/Stryker, DePuy and Integra are seen as biggest rivals. The competition may stunt the company’s development in the future.

Paragon 28 hasn’t disclosed its financial performance. It is unknown if the company is currently profitable and if there’s any tendency toward profitability.

Financials and Valuation

Paragon 28 has raised $4M of preferred equity capital during its Series A venture round in 2011. In August 2020, Paragon 28 completed a Series B financing of undisclosed amount. The round was co-led by 2 well-recognized investors in healthcare companies. Piper Sandler Merchant Banking, a commercial stage growth equity investment business, and MVM Partners, a healthcare growth equity investment firm. The financing also included participation from an existing Series A investor.

In October 2020 Paragon 28 has hired Steve Deitsch as its first chief financial officer, which can be a sign of an upcoming exit. Mr, Deitsch has previously served as CFO at BioScrip, a former publicly traded home healthcare services company with revenues in excess of $700 million. The company completed a successful merger with Option Care in 2019 and more than doubled its market capitalization during Steve’s tenure as CFO.

According to the 2018 interview with Frank Bono, CTO and CO-Founder of Paragon 28, the company targets annual revenue of $1 billion. The company grew by 63% in 2017, well above the market growth rate. At that time it anticipated 55% growth in 2018 and continued growth in the years to come.

We estimate that the company has achieved $100M annual revenue in 2019 and is currently growing at 30-50%. We have been recently told by a source close to the company that it has demonstrated 3rd straight record month in November 2020. Similar public medical equipment company is Stryker (SYK). At the end of November 2020 its stock was trading at 6.50 times last twelve month revenue with slower growth for the past 5 years (9%) as compared to Paragon 28. Paragon 28 shares are worth $41.14 on the secondary market, which suggests a valuation of $550M. Paragon’s projected market capitalization, given it maintains the current growth trajectory, will amount to $1,5-3 billion on the public market. The expected return on investment is 200%.

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