Inspire Medical Systems has raised $40m in a Series E financing, which was led by investment firm OrbiMed.
The medical company will use proceeds for commercialisation of its Inspire upper airway stimulation (UAS) therapy in the US.
Inspire therapy is used in a subset of patients with moderate to severe obstructive sleep apnea (OSA) who are not able to use continuous positive airway pressure (CPAP) devices.
The FDA-approved therapy is a fully implanted device, which uses mild stimulation of the hypoglossal nerve to maintain an open airway while sleeping.
The therapy will consist of three components, being a small generator, a sensing lead and a stimulation lead.
Inspire Medical Systems president and CEO Tim Herbert said: "This round of funding will enable Inspire Medical Systems to invest in the people and programmes necessary to make this much-needed treatment available to patients and physicians."
Patients implanted with Inspire therapy who participated in the company's stimulation therapy for apnea reduction pivotal clinical trial experienced a 68% reduction in apnea events, a 70% decrease in oxygen desaturation events, and significant improvements in daytime functioning, according to Inspire Medical.
OrbiMed private equity partner Chau Q Khuong said Inspire therapy fills an important and significant gap in the OSA treatment continuum.
"We believe that both physicians and patients will have great interest in this innovative new therapy," Khuong said.
Inspire therapy is commercially available at several US clinical centres while additional centres will have the therapy available in the second half of 2014.
More than 18 million people in the US currently suffer from sleep apnea.