Elon Musk’s Neuralink and OpenAI-backed Merge Labs are advancing brain-computer interface (BCI) technology in the U.S. Meanwhile, Chinese entrepreneur Phoenix Peng is developing competing initiatives through two startups: NeuroXess, focusing on implantable BCI systems, and Gestala, creating non-invasive ultrasound-based BCIs.
Gestala has raised $21.6 million (CN¥150 million) merely two months post-launch, with a valuation ranging between $100 million and $200 million, founder and CEO Phoenix Peng revealed to TechCrunch.
This funding round, co-led by Guosheng Capital and Dalton Venture, with participation from Tsing Song Capital, Gobi Ventures, Fourier Intelligence, Liepin, and Seas Capital, was significantly oversubscribed, with investor commitments surpassing $58 million, Peng shared.
This is China’s largest early-stage funding within the BCI sector. Peng plans to allocate the funds towards R&D, expanding the workforce from 15 to around 35 employees by year-end, and establishing a manufacturing facility in China. The startup, established three months ago, aims to finalize its first-generation prototype by the year’s end.
The global BCI industry is witnessing increased investment in ultrasound technology. Gestala is the inaugural ultrasound BCI firm in China, though not globally. Numerous ultrasound BCI startups have surfaced in the U.S. in recent years, including Merge Labs, one of the largest.
Peng believes ultrasound could signify the next wave of brain-computer interface technology, providing broader whole-brain access and novel ways to engage with neural activity.
The founder suggests that non-invasive ultrasound could tackle one of the primary hurdles to BCI adoption: the risks linked to brain surgery. Compared to implanted electrode systems, this technology can observe a larger brain region, encompassing deep neural circuits. Through phased-array ultrasound, the system can precisely stimulate or suppress neural activity sans the need for surgery, he elaborated.
Despite increasing geopolitical tensions, Peng remains optimistic that the U.S. and China can cooperate on deep-technology research.
“Both countries bring different strengths,” Peng stated. “China offers large-scale clinical research capacity and efficient supply chains, while the U.S. possesses world-class scientific talent.” Collaborative efforts could also focus on compiling large clinical datasets to propel global neuroscience research, he noted.
The company is investigating multiple applications for its technology. Medically, its primary program focuses on chronic pain management. Chronic pain impacts large populations in both the U.S. and China, and existing academic studies indicate that ultrasound stimulation can significantly decrease pain levels, Peng commented.
The startup is also exploring applications in mental health conditions, such as depression, PTSD, autism, and OCD, as well as stroke rehabilitation. Other long-term targets include Alzheimer’s disease, essential tremor, and Parkinson’s disease. In total, the company is researching six to eight potential indications, though most are in early research stages instead of clinical trials.
Gestala believes its edge over global competitors is rooted in speed and scale. By utilizing China’s integrated manufacturing ecosystem, the startup asserts it can transition from development to production more swiftly than numerous international competitors.
The company is also collaborating with major Chinese hospitals to expedite clinical trials at substantially lower costs — approximately 20% to 33% of comparable studies in the U.S. or Europe. Concurrently, Gestala is establishing an “Ultrasound Brain Bank,” a significant clinical dataset aimed at training AI models to decipher brain signals and bolster future neurological diagnostics.