Elon Musk’s Neuralink and OpenAI-backed Merge Labs are making progress with brain-computer interface (BCI) technology in the US. Meanwhile, Chinese serial entrepreneur Phoenix Peng is building rival efforts through two startups: NeuroXess, which develops implantable BCI systems, and a second company, Gestala, which develops non-invasive ultrasound-based BCIs.
Gestala has raised $21.6 million (CN¥150 million) just two months after launch, at a valuation of $100 million to $200 million, founder and CEO Phoenix Peng told JS.
The round, co-led by Guosheng Capital and Dalton Venture with participation from Tsing Song Capital, Gobi Ventures, Fourier Intelligence, Liepin and Seas Capital, was heavily oversubscribed, with investor commitments totaling more than $58 million, Peng added.
This is the largest seed funding in China’s BCI industry. Peng will use the money for research and development, expanding the team from 15 to about 35 employees by the end of the year, and building a manufacturing facility in China. The three-month-old startup aims to complete its first-generation prototype by the end of the year.
The global BCI industry is currently experiencing a massive wave of investment in ultrasound technology. Gestala is the first ultrasound BCI company in China, but not the first globally. Several ultrasound BCI startups have emerged in the US in recent years, including Merge Labs, which is among the largest.
Peng believes ultrasound could represent the next generation of brain-computer interface technology, offering the potential for broader access to the whole brain and new ways to interact with neural activity.
The founder says non-invasive ultrasound could eliminate one of the biggest barriers to BCI adoption: the risks associated with brain surgery. Compared to implanted electrode systems, the technology can monitor a larger part of the brain, including deep neural circuits. Using phased-array ultrasound, the system can also precisely stimulate or suppress neural activity without the need for surgery, he explains.
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Despite rising geopolitical tensions, Peng still hopes that the US and China can cooperate in deep technology research.
“Both countries bring different strengths,” Peng said. “China offers large-scale clinical research capacity and efficient supply chains, while the US has world-class scientific talent.” Joint efforts could also focus on building large clinical data sets to support global neuroscience research, he said.
The company is exploring various applications for its technology. Medically, treating chronic pain is the startup’s main program. Chronic pain affects large populations in both the US and China, and existing academic studies suggest that ultrasound stimulation can significantly reduce pain levels, Peng said.
The startup is also studying applications in mental health issues including depression, PTSD, autism and OCD, as well as stroke rehabilitation. Other long-term goals include Alzheimer’s disease, essential tremor and Parkinson’s disease. In total, the company is investigating six to eight potential indications, although most are still in early research stages and not in clinical trials.
Gestala says its advantage over global rivals comes from speed and scale. By leveraging China’s integrated manufacturing ecosystem, the startup believes it can move from development to production faster than many international competitors.
The company is also working with major Chinese hospitals to accelerate clinical trials at a significantly lower cost – about 20% to 33% of comparable trials in the US or Europe. At the same time, Gestala is building what it calls an “Ultrasound Brain Bank,” a large clinical dataset designed to train AI models to decode brain signals and support future neurological diagnostics.
