Announcing our investment in Valparaiso, IN-based AlloDirect, a direct sourcing platform connecting tissue banks with ambulatory surgery centers, hospitals and integrated delivery networks.
Allograft tissue procurement sits behind some of the most consequential moments in orthopedic and reconstructive surgery, whether the surgeon has the graft they need, whether it's documented correctly, whether the facility even knew it was in inventory before the case started. And yet the process that manages all of this still runs on the same tools it always has: phone calls, faxes and a set of individual supplier relationships that never talk to each other.
AlloDirect was built to replace that with one system. The platform gives ambulatory surgery centers, hospitals and integrated delivery networks a single catalog of more than 24,000 allografts across six integrated, AATB-accredited tissue banks, and it works at the exact moment that matters: the order. Facilities search, compare and order across every connected bank in one workflow, and lot and UDI documentation is captured at the point of order instead of reconstructed afterward. The platform is live in production today at facilities across Pennsylvania, Indiana, Texas, Oklahoma and Florida.
The model works because it serves both sides of that transaction at once. Tissue banks get a storefront and distribution reach into facilities they'd otherwise have to win one relationship at a time. Facilities get a single catalog and ordering workflow instead of managing a handful of separate suppliers by phone. Same underlying data, serving both sides instead of routing margin through a chain of distributors and sales reps in between.
The category is also moving toward exactly the facilities that need this most. In its CY 2026 payment rule, CMS added more than 500 procedures to the ASC covered procedures list and began a three-year phase-out of the inpatient-only list, starting with 285 largely musculoskeletal procedures. Most of the surgery that uses allograft tissue is shifting outpatient, straight into the settings with the least procurement infrastructure of anyone in the chain.
“I spent six years watching surgeons get the graft they wanted and facilities have no idea what they paid for it or where it came from until after the case. Everything downstream of that order got software. The order itself never did,” said Rhett Barker, Founder & CEO.
That combination is the real story here. Rhett Barker spent six years in orthopedic sales at Zimmer Biomet, in the operating room every week, watching this exact decision get made with no system behind it. He's also a repeat founder: he built and led Flipside Solutions through its 2021 acquisition, then served as Market Lead for Motor, a venture that incubated out of that deal. AlloDirect's advisory bench extends that experience further, merging executive medical device operators with physician leaders shaping the product from the clinical and commercial sides at once.
“We look for founders who understand the structure of their industry, not just the surface of it. Rhett spent six years inside this supply chain and came out knowing exactly which part of it does not need to exist,” said Victor Gutwein, Managing Partner. “AlloDirect is grafting software onto a category that has never had any, and the people who benefit are the facilities buying and the patients receiving.”
We're excited to back Rhett and AlloDirect as he builds the ordering layer for a supply chain that has never had one.
About AlloDirect: AlloDirect is a direct sourcing platform connecting AATB-accredited, FDA-registered tissue banks with ambulatory surgery centers, hospitals and integrated delivery networks. The platform gives facilities a single catalog across suppliers, one ordering workflow, and lot and UDI documentation captured at the point of order. AlloDirect is headquartered in Valparaiso, Indiana. For more information, please visit allo.direct.
Learn more: AlloDirect Announces Pre-Seed Round Led by M25 to Build the Ordering Layer for Tissue & Biologics
About M25: M25 is an early-stage software-focused venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest. Since launching in 2015, M25 has become the most active investor in the region, quickly becoming the preferred seed investor for the next generation of Midwest unicorns. Portfolio companies include Kin Insurance, Loop Returns, Astronomer, Branch Pay, Authenticx and more. For more information, please visit www.m25vc.com.
