Subtle Medical Secures Tens of Millions in USD Series B Funding, Accelerating Global Expansion with Nearly RMB 100 Million in Annual Orders

On November 17, 2022, Subtle Medical, a renowned AI medical imaging company, completed a Series B financing round amounting to tens of millions of US dollars. The round was led by Zhongding Capital and Chunhua Ventures, with participation from Fusion Fund, Bencao Capital, Banyan Pacific Capital, Data Capital, European healthcare fund Crista Galli Ventures, Catchlight Capital, and others. Most existing shareholders significantly increased their follow-on investments in this round.

Shentou Medical has achieved multiple industry firsts in the field of AI medical imaging. For example,The Deepwise Medical team first achieved a 4-10x acceleration in MRI and PET imaging processes using AI technology in 2016, while ensuring diagnostic-level accuracy; they also leveraged AI to enhance MRI images, reducing contrast agent usage by tenfold.

Comparison of MRI Images Before and After Applying SubtleMR™

In terms of patents, Subtle Medical has been strategically building its global intellectual property protection since 2017 and currently holds more than 20 international patents. Notably, Subtle Medical has reached an agreement with Stanford University to obtain exclusive licensing rights to the technologies, multiple patents, and extensive datasets developed by its founder, Dr. Enhao Gong, during his doctoral studies at Stanford from 2012 to 2017.

Commercially, Subtle Medical’s AI products are accelerating their strategic rollout across markets in China, the United States, and Europe. The solutions have been deployed at more than 400 healthcare institutions and imaging centers worldwide, with global orders totaling nearly RMB 100 million.

Commenting on Subtle Medical’s outstanding performance in recent years in market expansion and R&D advancement, Zhu Yingchun, Partner at Zhongding Capital, stated: “With the deepening of the Industry 4.0 wave, the intelligent transformation of healthcare services, and innovation-driven industrial upgrading, Subtle Medical has leveraged its unique AI-powered imaging workflow solutions to promote high-quality medical resources through intelligent technologies, helping healthcare and medical imaging institutions reduce costs and improve efficiency, thereby delivering accessible healthcare benefits to the general public.”

Founded at the dawn of the medical AI boom, Subtle Medical has taken a different path from other startups. Instead of directly targeting intelligent analysis of medical images, it focuses on the image generation process, leveraging AI technology to accelerate imaging.

Globally, the vast majority of MRI and PET/CT scanners are operating at full capacity, with patients often facing a wait of at least three days for an MRI appointment. Therefore, if the scan time, which previously took 10–20 minutes, could be reduced to just a few minutes, more patients would gain timely access to examinations and initiate treatment earlier.

This sector is not without competition. In fact, numerous startups and medical imaging equipment manufacturers are attempting to enter the market by developing similar technologies. However, image quality and computational efficiency achieved by traditional algorithms fail to meet the clinical demands of hospitals. Meanwhile, imaging giants can only accelerate specific sequences for certain organs and tend to integrate these capabilities exclusively into their most cutting-edge, high-end systems, thereby preventing widespread deployment across all devices.

In contrast, Subtle Medical’s AI products not only shorten examination time and reduce radiation dose but also integrate seamlessly into imaging workflows, without disrupting physicians’ clinical routines. According to Gong Enhao, founder of Subtle Medical, the company’s existing MRI acceleration solutions have nearly covered all magnetic resonance sequences, enabling AI-based acceleration for the vast majority of MRI scans.

Enhancing image quality, reducing radiation dose, and shortening examination time—without the need for equipment replacement or workflow adjustments—are highly attractive to hospitals. Through controllable software investments (typically via an annual subscription model), hospitals can effectively increase the volume of patient examinations.

After completing the initial product implementation,Deepwise Healthcare has been continuously expanding its capabilities, developing a range of medical imaging solutions tailored to different specialties and functions, thereby enhancing its product portfolio and progressively achieving comprehensive coverage across the entire AI-powered medical imaging landscape.

These products can be applied to medical imaging examinations across various modalities, including magnetic resonance imaging (MRI), computed tomography (CT), nuclear medicine, and X-ray. They are also applicable in emerging scenarios such as clinical image quality control, workflow optimization, and pharmaceutical clinical trials.

Specifically, SubtlePET™ and SubtleMR™, developed in the early stages by Deepwise, are currently the only medical imaging products in the industry to have obtained four U.S. FDA approvals, four European CE certifications, and registration certificates from China’s NMPA. These products have become the mainstay of the company’s recurring revenue. Meanwhile, both products have also been approved in other regions, including South America, Canada, Singapore, and Australia, further strengthening global expansion into emerging markets.

The company’s third product, SubtleGAD™, is dedicated to enhancing MRI scan quality while avoiding the issue of gadolinium deposition associated with MRI examinations. It has secured commercial collaborations worth over $10 million with leading international pharmaceutical companies such as Bayer.

Furthermore, SubtleSynth™, an image generation acceleration product, has entered the FDA review stage. SubtleIR™, which focuses on real-time intraoperative image enhancement, and SubtleQC™, which optimizes contrast imaging workflows, are also under development and in the process of applying for FDA clearance.

This portfolio of medical imaging enhancement products is poised for greater momentum in the future. As an AI vendor with access to first-hand imaging equipment data, Deepwise Medical holds significant potential to integrate workflow applications. This includes synthesizing upstream non-image information applications with downstream quantitative analysis applications, ultimately achieving end-to-end holistic optimization across the entire value chain.

Currently, Subtle Medical’s solutions have established closed-loop workflows in many areas. For instance, AI can provide real-time feedback during image acquisition and optimize the imaging process by adjusting acquisition parameters through clinical deployment, thereby achieving a closed loop for optimized image acquisition.

According to Gong Enhao, in addition to MR equipment, Shentou’s product portfolio also covers various imaging modalities, including PET, CT, SPECT, and X-ray, empowering equipment upgrades and continuously enhancing customer value. Even within the same imaging examination, Shentou Medical’s products can be used in combination, not only without conflict but also delivering complementary and even multiplicative effects.

For example, SubtleMR™ can reduce scan times, SubtleGAD™ can minimize gadolinium deposition and associated side effects, SubtleSynth™ can streamline imaging protocols by eliminating certain contrast-enhanced sequences, and SubtleQC™ can assess image quality. When these solutions are used in combination, they can help hospitals and imaging centers achieve cost reduction and efficiency gains across multiple dimensions.

Deepwise Medical quickly gained a firm foothold in the market thanks to its differentiated strategy and robust product capabilities.

After completing a $12.2 million Series A financing round led by Bencao Capital in 2020, Subtle Medical entered a fast lane for business growth. In 2021, despite the ongoing shadow of the global COVID-19 pandemic, Subtle Medical achieved a 400% increase in operating revenue and more than a fivefold growth in its global clinical service volume. By 2022, the company’s revenue growth continued, with annual order value approaching the RMB 100 million mark.

According to Gong Enhao, founder of Deepwise Healthcare, the company has implemented various business models globally, achieving recurring revenue through SaaS subscriptions and pay-per-case pricing for its AI-powered medical imaging products.

For hospital and imaging center clients, Subtle Medical’s products can significantly reduce patient scan times, effectively increase patient throughput, improve examination efficiency, and reduce costs while enhancing operational efficiency. Subtle Medical enters into long-term service agreements with hospitals on an annual or quarterly payment basis, delivering tangible improvements in efficiency and revenue growth, thereby achieving a win-win outcome.

Based in China, Shentou Medical’s partners include many of China’s top-tier hospitals as well as leading health checkup and high-end medical imaging service groups. The former includes renowned institutions such as Ruijin Hospital, Beijing Tiantan Hospital, Changhai Hospital, Beijing Chaoyang Hospital, and the First Affiliated Hospital of Soochow University; the latter comprises major domestic imaging groups such as Meinian Onehealth, Yimai Yangguang, and Quanjing Medical. The domestically developed upgrade software solutions, SupMR and SupPET, have been clinically implemented in more than 100 hospitals, imaging centers, and health checkup centers across China.

Comparison of PET Images Before and After Applying SubtlePET™

On a global scale, DeepWise Medical has been deployed in more than 400 imaging service alliances and enterprises worldwide. These include the largest imaging centers and groups in the United States, China, Europe, and Latin America, such as RadNet (the largest imaging center alliance in the U.S.), Radiology Partners (the largest radiologist group in the U.S.), Vizient and Capstone (the largest healthcare purchasing alliances in the U.S.), Kaiser Permanente (the largest physician group in the U.S.), Affidea (the largest third-party diagnostic provider in Europe), and DASA (the largest medical examination institution in South America).

Today, DeepWise Medical’s products have undergone extensive quality validation through collaborations with leading medical institutions worldwide. Authoritative organizations—including Stanford University School of Medicine, the University of California, San Francisco (UCSF) School of Medicine, MD Anderson Cancer Center, Mount Sinai Health System, and UPMC (University of Pittsburgh Medical Center)—have endorsed these products and published clinical validation studies.

From the perspective of commercial implementation, the continuous refinement of the product portfolio further empowers the expansion of the customer base. According to Gong Enhao, the advantage of Deepwise Medical’s commercialization lies in its high customer retention among existing clients and a strong repurchase conversion rate for new products; once launched, new products rapidly gain market share.

“Many customers are concurrent users of both SubtlePET™ and SubtleMR™. In fact, nearly all customers of our first product (SubtlePET™) have converted into customers of our second product, SubtleMR™. From a sales cycle perspective, once a product has been adopted by a healthcare institution,”We will deploy the SubtleEdge™ processing platform at client sites and assign clinical deployment specialists to optimize overall imaging parameters, among other tasks. This comprehensive solution demonstrates strong customer stickiness. As more of our new products are expected to deliver greater value to clients, repeat purchases and sustained revenue growth per account will follow naturally.“Gong Enhao said.”

Li Ruoqi, Executive Director of Chunhua Venture Capital, stated, “Subtle Medical possesses globally leading technologies and a world-class team of AI and clinical imaging experts. Its products are not only at the forefront globally, but it has also distinguished itself by building a top-tier global solutions platform. AI holds vast application potential in healthcare services and pharmaceutical R&D. We believe that as Subtle Medical expands its product portfolio, its solutions will continue to support hospitals in achieving clinical digital transformation, leveraging technology to address healthcare disparities and contribute to the development of China’s new medical infrastructure.”

In addition to generating revenue through the growing number of installations in healthcare institutions, Subtle Medical is also seeking to expand its customer reach via partners, thereby maximizing its potential value.

For example, the OEM solutions actively promoted by Deepwise Medical are gradually achieving commercialization, with collaborations established with top global pharmaceutical companies, medical imaging equipment manufacturers, and contract research organizations (CROs), thereby further expanding revenue.

In terms of imaging equipment manufacturers, Subtle Medical has collaborated with several renowned imaging equipment vendors from the perspectives of different imaging modalities and applications. At the end of 2021, Subtle Medical announced a pre-installation partnership with Siemens, the leader in the MRI market, becoming the sole AI imaging processing partner for Siemens’ image reconstruction pipeline, OpenRecon. Since the beginning of this year, the two parties have further deepened their collaboration. At the 2022 China International Import Expo (CIIE), they jointly announced with Shanghai Siemens Healthcare a plan to deepen local innovation and implement collaborations on domestically produced intelligent technologies.

In terms of pharmaceutical company collaborations, Subtle Medical has partnered with leading pharmaceutical companies such as Bayer Healthcare. Subtle’s AI-powered image enhancement and intelligent analysis technologies for modalities like MRI and PET can improve trial efficiency and data quality in drug development for diseases such as cancer and Alzheimer’s disease.

In addition, Deepwise Medical collaborates with multinational corporations such as Intel and NVIDIA to optimize technologies and deployment platforms in the field of medical AI, enhance the performance and efficiency of AI algorithms, and deliver applications with the greatest clinical value and potential for practical implementation.

Extensive collaboration is closely linked to Deepwise Medical’s unique strategic positioning.

From the perspective of product characteristics,ShenTou’s products are compatible with device models and series from various brands, demonstrating strong universality. For instance, certain models and series that GE recently announced as compatible have already been supported by ShenTou Medical’s products for two years.Meanwhile, as a third-party solution provider, Deepwise’s software products undergo faster updates and replacements compared to equipment manufacturers, with continuous optimization and iteration.

From a competitive landscape perspective, Subtle Medical holds distinct exclusive advantages as the only third-party solution provider in the industry to have obtained certifications from the U.S. FDA, European CE, and China’s NMPA, unlike its non-equipment manufacturer peers. Furthermore, compared with equipment manufacturers currently entering the AI medical imaging solutions market, Subtle Medical has established an earlier presence and possesses more advanced technology.

In Gong Enhao’s view, the competition between medical imaging equipment manufacturers and third-party solution providers is not a zero-sum game; the ultimate goal of technological development is to deliver value to customers such as hospitals and imaging centers. For instance, the deep collaboration with Siemens demonstrates that close partnerships between third-party solution providers and equipment manufacturers can multiply the value for both parties. Subtle Medical’s technology is compatible with hardware upgrades and iterations, enabling it to deliver sustained value.

Gong Enhao also revealed that the Subtle Medical platform features strong compatibility and easy deployment. In the future, the platform is expected to support software developed by other vendors. Preliminary testing with relevant partners is already underway within the company, covering applications such as quantitative imaging and diagnostic tools. To date, Subtle Medical’s products have been adopted by more than 400 hospitals and imaging centers worldwide, and the establishment of an open platform is poised to deliver greater value to customers.