FlexoLinkai Secures Tens of Millions in Pre-A Funding to Accelerate Clinical Development and Commercialization

VCBeat learned that FlectoThink, a company dedicated to creating "brain-computer interface + human-computer interaction" infrastructure, has recently completed a Pre-A round of financing worth tens of millions of yuan. This round was led by Shanghai Blue Bay Sci-Tech Group, with investments from Sichuan Zhenghexiang Health Pharmacy Chain Co., Ltd., a former Bain Capital partner, and two other industrial capital firms that are keeping their financial investments undisclosed for now.Beijing Jupiter Travel Consulting Co., Ltd. served as the financial advisor for this round of financing. After the completion of this round of financing,FlectoThink plans to accelerate the commercial expansion of its already approved and marketed EEG sleep monitor and other products, while also advancing the clinical research of its R&D pipeline and the registration process for multiple Class II and Class III medical devices.

This is also the new round of financing obtained by FlectoThink after the Angel Round in 2021 and the Angel+ Round in 2022. In the current environment where capital investment frequency has decreased and investments have become more cautious, why is FlectoThink still favored by capital?

Driven by policies, technology, and other factors, the brain-computer interface field is experiencing vigorous development.

In terms of market size, according to FlectoThink, the global brain-computer market is growing rapidly. In medical applications, the market is expected to reach $145 billion by 2040; meanwhile, China's brain-computer market is also expected to exceed 100 billion yuan by 2040.

In a market that is expected to grow rapidly, how to choose a suitable path for layout is a question that all innovative companies need to face.

FlectoThink, founded in 2020, has rapidly transitioned its products "from concept to prototype to product" over the past three years. In fact, in the early stages of its establishment, due to the interdisciplinary background of the founding team and the global perspective of Dr. Sun Yu, the core founder, FlectoThink consciously implemented a differentiated strategy.

Co-founder and Chief Business Officer Wenkai Chen pointed out, "From the outset, we established a strategic focus on the future-oriented, high-potential blue ocean markets of brain-computer interface and human-computer interaction based on brain-computer technology. On one hand, in the vast red ocean of traditional healthcare, there are already numerous companies competing fiercely; moreover, most companies simply align their products with the national health insurance catalog, which, for a technologically advanced company like ours, lacks challenge. On the other hand, FlectoThink possesses leading-edge technology and positions itself as a creator of brain-computer intelligence infrastructure. Our goal is to better serve the market and address current pain points, rather than duplicating existing efforts."

For FlectoThink, the confidence stems from its leading interdisciplinary team that integrates "brain-computer technology + AI + neuroscience."

Currently, FlectoThink has a research and development team of more than 60 people. One-third of the team members hold doctoral or master's degrees, including a foreign academician of three prestigious academies. For instance, Dr. Sun Yu, the founder, graduated from the Department of Polymer Science at the University of Akron in Ohio, which is recognized as one of the top departments in the U.S. The Chief Scientific Officer, Dr. Liu Bing, has a background in biomedical engineering and comes from the Institute of Automation at the Chinese Academy of Sciences. Before returning to China, he was a researcher at Duke University’s world-leading brain-computer interface laboratory in the U.S., focusing on research areas such as implantable brain-computer interfaces and computational neuroscience.

It is also such a team,Led FlectoThink to obtain 218 patent documents and nearly 60 invention patents (as of 2022); jointly initiated the application for the "Science and Technology Innovation 2030 – ‘Brain Science and Brain-like Research’ Major Project" with Beijing 301 Hospital, Tiantan Hospital, and Tsinghua University; participated in drafting and externally releasing the MIIT CAICT's "Brain-Computer Interface Overall Vision and Key Technologies Research Report (2022)."It recently participated in the election and became a standing director unit of the Brain-Computer Interface and Brain-like Intelligence Professional Committee of the China Association for Standardization. Dr. Sun Yu was also appointed as the vice chairman. Meanwhile, Dr. Liu Bing was appointed as a member of the ISO/IEC JTC1 Brain-Computer Interface Chinese Expert Committee under the China Electronics Standardization Institute.

A global strategic vision, familiarity with cutting-edge EEG, EMG technologies and related materials, as well as a focus on commercialization, have enabled FlectoThink to quickly establish a strategic layout in "brain-computer interface + human-computer interaction." The company is concentrating its efforts on materials and algorithms, with a key focus on planning three major product lines——

One of them is the medical-grade flexible EEG sleep patch series developed by FlectoThink in the field of electroencephalography.Currently, the first-generation EEG sleep monitor product based on the flexible EEG sleep patch has been approved for marketing. The second-generation multi-modal PSG-like product is also in the registration process. On the basis of achieving precise sleep monitoring, FlectoThink is further advancing precision sleep intervention through sound-targeted stimulation, which is currently undergoing clinical trials. In addition, for hospital use, and based on preliminary clinical research data, FlectoThink is further expanding the medical application scenarios of EEG sleep patches, such as the quantitative monitoring and identification of comorbidities between sleep and diseases like cognition, emotion, and pain.

Professional Version of BM01 Series Distributed EEG Sleep Apnea Monitoring System and Construction of Big Data Sleep Center Platform

Chen Wenkai pointed out, "Based on precise quantitative numerical indicators such as sleep monitoring, we can better empower all parties in the sleep and sleep comorbidity industry chain." For example, digital therapeutics companies often lack sufficiently accurate monitoring devices in home scenarios, making it difficult to effectively evaluate the effects of digital therapies. However, with devices like FlectoThink's sleep monitor, this situation can be changed. Additionally, FlectoThink can also serve manufacturers of sleep regulation products by combining quantifiable sleep metrics with various products to deliver a quantifiable positive closed-loop application experience to users. In the hospital market, FlectoThink is pleased to find that the "Chinese Expert Consensus on Insomnia Digital Therapeutics" published by the Psychosomatic Medicine Branch of the Chinese Medical Association has included FlectoThink's latest EEG patch products developed based on brain-computer interface technology and sound-targeted closed-loop physical therapy technology. Meanwhile, FlectoThink is collaborating with major hospitals in provinces such as Hebei and Sichuan, as well as cities like Nanjing and Shenzhen, to build regional sleep and sleep comorbidity monitoring and treatment centers. They are also establishing sleep monitoring sub-centers within their cooperative medical consortium institutions and community health centers, using a tiered diagnosis and treatment system to support patients' full-course health management based on sleep.

The second is FlectoThink's invasive flexible brain-computer interface product, which is part of the company's future-oriented strategy.Its invasive brain-computer interface (BCI) product is currently collaborating with several top hospitals in China, including Xuanwu Hospital and the 301 Hospital. FlectoThink recognizes that integrating adaptive decoder design with neuromorphic intelligence technology based on neural learning will lead to the next generation of BCI systems: high-performance, highly robust, and more versatile. Its unique materials, chips, system architecture, decoding algorithms, and medical expertise also contribute to FlectoThink's breakthroughs in invasive BCIs. Currently, the company is primarily advancing applications of invasive BCIs for ALS patients, such as writing and visual implants.

Thirdly, there is FlectoThink's EMG product. The similarity in research logic to EEG products allows FlectoThink to expand rapidly.While creating a new interactive approach for the future metaverse, FlectoThink is also attempting to commercialize its technology: currently, it has collaborated with a major domestic automobile manufacturer in China to validate human-computer interaction solutions based on electromyography, exploring entirely new commercial applications.

Behind the different pipeline layouts, FlectoThink also plans to register medical device licenses for its software and hardware products respectively, to meet the needs of different customers. In line with the technical research philosophy upheld by a group of brain-computer interface manufacturers in China, FlectoThink continues to deepen its technical expertise through its own team. At the same time, FlectoThink emphasizes that meeting market demands, achieving the commercial implementation of technology, and expanding product usability can better contribute to the development of technology.

Chen Wenkai, co-founder of FlectoThink, pointed out that this round of financing will also be mainly used in the following aspects——

First, further promote the market expansion of the EEG sleep monitor product that was approved in May this year.For FlectoThink, the promotion model has relatively matured. The company plans to focus on hospitals at all levels, assisting in building regional intelligent sleep centers. It will also collaborate with institutions such as sports rehabilitation centers, Traditional Chinese Medicine (TCM) organizations, health management entities, retail pharmacies, internet hospitals, and psychological meditation institutions to integrate and empower its products. While prioritizing the H-end market and balancing the B-end market, it will gradually expand into the C-end market through partners’ online medical e-commerce platforms, promoting product coverage on a larger scale. Additionally, based on the demands of Sichuan Zhenghexiang Health Pharmacy Chain Co., Ltd., a leading pharmacy chain in Southwest China that participated in this round of financing, FlectoThink's internet hospital is currently applying for a license. Subsequently, it will integrate with Zhenghexiang’s more than 1,000 offline pharmacies, further empowering pharmaceutical companies’ digital transformation in health through quantifiable data from wearable EEG patches.

Secondly, it is to further explore the commercial application of EMG armbands.FlectoThink, while conducting pilot programs with automobile manufacturers, will further collaborate with metaverse infrastructure providers and mainstream AR/VR/XR brands to explore interaction methods and engage in commercialization practices.

Again, it is to increase the R&D investment in invasive brain-computer interface products and accelerate the advancement of clinical trials.Better address the current challenges faced by patients—such as restoring walking ability through spinal cord stimulation, rebuilding vision for the blind via artificial visual perception, decoding emotions, and closed-loop emotion regulation, among others.

FlectoThink also stated that this round of financing will be used to further expand the team and attract more talent dedicated to the "brain-computer + EMG interaction" field.

For FlectoThink, they will update and iterate on their existing products step by step while expanding application scenarios. Moreover, their market will not be limited to China alone—based on the full application of their products, they plan to explore broader overseas markets.

"A technology takes a lot of time to evolve from a concept to clinical application. Currently, many companies in the brain-computer interface field are still in the early stages of development. Enterprises need to be more down-to-earth, identify actual needs, and gradually solve industry pain points. Only by facing the market and synchronizing commercialization with technological research and development can we better support scientific research." Chen Wenkai pointed out that FlectoThink will also showcase human-computer interaction products available for on-site experience at the Suzhou Electronics Information Expo in November. Meanwhile, it plans to formally sign a cooperation contract with a Global Fortune 500 company at the 2023 Shanghai CIIE. FlectoThink sincerely invites industry practitioners to visit and witness.

For the investment in FlectoThink,Deng Jianxin, Founder of Blue Bay Innovation GroupSaid: "The brain-computer interface track is about to move towards the critical point of technological commercialization and industrialization, especially in the field of human-computer interaction. Technological and application innovations in brain-computer interfaces are expected to drive a paradigm shift in human-computer interaction. FlectoThink holds global leadership in the brain-computer interface + human-computer interaction field, not only possessing a team with both technological innovation capabilities and comprehensive commercialization abilities but also innovatively integrating three major scenarios: brain-computer interface + electromyography + metaverse, exploring a trillion-dollar application market. We highly anticipate that FlectoThink will continue to leverage its world-class 'EEG + EMG' technology and disruptive 'material + module' technology to continuously achieve application innovation and technological iteration, becoming a benchmark enterprise in the future brain-computer interface track."

The Financial Advisor for This Round of FinancingSu Tongming, Founding Partner and CEO of Jupiter Capital"It is stated: 'The brain-computer interface sector has entered a period of rapid development. Jupiter Capital continues to be optimistic about the technological and product innovations in the brain-computer interface field. As a leading innovative enterprise in the "brain-computer + neural interaction" domain, FlectoThink has been exploring technological and product innovations in the brain-computer interface area for a long time, focusing on the research and development of brain-computer interface technology and its commercial applications. We are honored to maintain a long-term partnership with FlectoThink and to participate in this round of financing as financial advisors. We look forward to FlectoThink building a professional infrastructure for "brain-computer interface + human-computer interaction" for the global market after this new round of financing, delivering a new paradigm of human-computer interaction experience and future technology.'"

FlectoThink CEO Sun YuPointed out: "Against the backdrop of a capital and market downturn, the fact that we are still favored by numerous investors essentially reflects their confidence in China's future development and trust in China's self-innovative hardcore technology enterprises. FlectoThink is one such representative. With our unique materials, chips, system architecture, decoding algorithms, as well as medical research and clinical capabilities, we strike a balance between technological advancement and commercialization while connecting global resources to keep moving forward amidst adversity. We firmly believe that, in the near future, we will become one of the leading companies in the global brain-computer interface industry. We also look forward to more investors participating in our great cause in the future, such as those with industrial synergy and strategic investments."

Jupiter Capital is a long-term, in-depth partner of FlectoThink. The Jupiter Capital team has left a deep impression on me with their unique insights and extensive project experience in the brain-computer interface sector. We are grateful for the support from the Jupiter Capital team during this round of financing, which not only provided significant assistance to FlectoThink on the corporate financing side but also offered high-quality advice, help, and resource connections at the company strategy level. We look forward to continuing our cooperation with Jupiter Capital and creating brilliance together.

Blue Bay Sci-Tech Group is an innovative industrial ecosystem operator focusing on the life and health industry. With the basic business model of "industry + platform + capital + operation," it centers on industrial investment, with industrial operation and industrial services as its two wings. It is committed to building a regional innovation and entrepreneurship ecosystem alongside the Blue Bay standard industrial ecosystem.

Blue Bay Sci-Tech currently manages 5 industry funds with a total scale exceeding 1.5 billion yuan, focusing on early-stage investments, especially angel round projects. It has cumulatively invested in approximately 50 high-tech life science and health projects. Investment cases include Aosikang Biopharmaceuticals, Jingze Biotech, Yiying Technology, Haitai Biotech, Nolaisound Technology, Huyun New Drug, Notan Pharmaceuticals, Huiwei Medical, Tanyin Medicine, Tongxuan Medical, Yike Polymers, Hannuclear Medical, and Dassence Medical.

At the same time, Blue Bay Sci-Tech is deeply involved in the comprehensive development and operation of regional areas. Always adhering to the concept of "industry as the foundation, talent as the base, ecology as the soul, platform as the tool, capital as the core, and operation as king," it has assisted the government in building characteristic industrial clusters such as the Haimen Biomedical Town, Xianju Medical Device Town, Hanzhong Nuclear Medicine Industrial Park, and Dongying Animal Protection Biomedical Industrial Park. Striving to become the best accelerator in China's biomedicine field.

Zhenghexiang is a comprehensive health industry group focusing on direct-operated pharmacy chains, franchised pharmacy chains, clinic chains, pharmaceutical wholesale, Chinese herbal medicine production, and insurance services. Headquartered in Chengdu, it is a local pharmaceutical retail enterprise planned for listing and supported by the Sichuan provincial government. The group owns 9 retail chain companies, 1 franchised chain company, 1 wholesale company, 1 clinic chain company, 1 Chinese herbal medicine production company, and 1 insurance sales company. With over 5,000 employees, more than 4,500 of whom are pharmaceutical professionals. It operates over 1,200 stores covering provinces and municipalities such as Sichuan, Guizhou, Hunan, and Chongqing, with a total business area exceeding 200,000 square meters. The group offers more than 35,000 product varieties, has over 10 million active members, and generates an annual revenue of over 2.2 billion yuan. Ranked among the top 20 direct-operated pharmacy chains in China for 2019-2020 and sixth in cross-regional chains.

Jupiter Capital, founded in 2020, is a new type of investment bank that supports top entrepreneurs from the founder's perspective and helps them in all aspects. Jupiter Capital assists companies in value restructuring, strategic planning, and implementation, focusing on areas such as new consumer trends, technology, and healthcare. The company’s partners and team members come from top-tier investment banks and investment institutions both domestically and internationally, senior management in the industry, and technical professionals. Based on its strong team capabilities and unique business advantages, Jupiter Capital has established close cooperation with leading companies in various fields, including Kuaikan Comics, Nayuki’s Tea, Yuntai Technology, Akulaku, and Dr. Check.