Likai Technology: Building a Global Neurovascular Intervention Platform Company

In the past two years, the neurointerventional field has been extremely hot in the capital market. According to incomplete statistics from VCBeat,2020Year6Month to8month, at least5Several companies have completed financing rounds worth hundreds of millions of yuan.

Why Is Neurointerventional Medicine Drawing Significant Attention? First, the field serves a large patient population, offering substantial market potential. Second, it is currently in a growth phase and has a high likelihood of replicating the trajectory seen in interventional cardiology a decade ago.

Shanghai KAI MEDTECH Co., Ltd. (hereinafter referred to as “KAI MEDTECH”), as a company in the field of neurointervention, currently has multiple products in the stages of research and development or regulatory submission. Unlike other companies in the neurointervention sector, KAI MEDTECH’s business model and operational model possess unique characteristics.

According to available information, KAI MEDTECH was founded in 2019 and specializes in the research, development, production, and sales of neurointerventional implantable medical devices, with a commitment to becoming a global leader in the treatment of cerebrovascular diseases. Shortly after its establishment, KAI MEDTECH successfully completed a Pre-A financing round worth tens of millions of yuan, led by Yangyun Capital. In June 2020, the company secured a $13 million Series A financing round, led by Hillhouse Ventures, with participation from Taifu Capital and Taiyu Investment, while existing investor Yangyun Capital continued to increase its stake.

How did KAI MEDTECH complete two rounds of financing in just two years? Why has KAI MEDTECH attracted the favor of top-tier investment firms? What are the advantages and distinctive features of KAI MEDTECH’s business model? What is KAI MEDTECH’s product portfolio strategy?

To address these questions, VCBeat conducted an exclusive interview with Mr. Liu An, Founder and CEO of KAI MEDTECH.

As the founder and CEO of KAI MEDTECH, Mr. Liu An chose to launch his venture in the field of neurointervention due to his substantial work experience and technical expertise in this area.

According to reports, Liu An previously worked in the Neurological Disease Treatment and Management division at Medtronic. He participated in the design of clinical trials for the first-generation mechanical thrombectomy device, the MERCI Retriever. Later, Liu An served at NAMSA, a globally leading medical device research and development outsourcing company, where he helped numerous neurointerventional innovative products obtain FDA registration clearance and facilitated their market launch in the United States.

Additionally, Liu An partnered with a leading U.S. company specializing in cerebrovascular interventional procedures to facilitate the market entry and commercialization of its innovative intracranial thrombus aspiration system in China.

After accumulating nearly 20 years of experience in the medical device industry, including both corporate practice and entrepreneurship, across China and the United States, Liu An is determined to make his mark in the neurointerventional field, where technological expertise is well-established.

Neurointervention is primarily associated with cerebrovascular diseases. According to the "Report on Cardiovascular Health and Diseases in China 2019," there are 13 million stroke patients in China, with over one million new cases annually. Moreover, the disability and mortality rates of cerebrovascular diseases have remained persistently high. In rural and urban areas, cardiovascular and cerebrovascular diseases account for 45.91% and 43.56% of all causes of death, respectively, surpassing those of cancer and other diseases.

The large patient population and the rigid demand for high-quality treatment options are driving medical companies to innovate in the field of neurointervention.According to the Blue Book of Chinese Medical Devices, the market size of neurointerventional devices in China reached RMB 6.3 billion in 2019, with 40,000 thrombectomy procedures performed. The compound annual growth rate (CAGR) from 2015 to 2019 was as high as 30%, indicating that the neurointerventional sector is entering a period of robust development.

Notably, competition is particularly fierce in the rapidly evolving field of neurointervention.According to incomplete statistics from VCBeat, more than 20 companies have entered the neurointerventional field. These include well-capitalized listed companies as well as innovative enterprises focused on research and development.

So, why has KAI MEDTECH garnered favor from top-tier investment firms? Why has it completed two rounds of financing within just two years of its establishment? Liu An introduced KAI MEDTECH’s core competitiveness to VCBeat.

First, KAI MEDTECH is positioned in the rapidly growing neurointerventional field, which is characterized by significant technical barriers. The neurointerventional sector features high entry barriers and complex technologies, earning it the reputation as the "crown jewel" of interventional surgery. Compared to other interventional products, neurointerventional devices demand higher precision and trackability, as well as greater material fineness and flexibility, thereby presenting higher technical barriers.

Second, KAI MEDTECH is committed to building itself into a comprehensive platform-based company through its global footprint and multi-product line R&D. By leveraging independent R&D, licensing partnerships, overseas M&A, and the introduction and incubation of new technologies, KAI MEDTECH has established a full portfolio of neurointerventional products as well as other interventional and innovative medical devices.

Third, KAI MEDTECH integrates multiple business and operational models. By drawing on advanced experience from the United States, KAI MEDTECH has combined diverse business models and leveraged its subsidiary, Hangzhou Jietong Ansheng Medical Technology Co., Ltd., to incubate innovative projects and explore novel operational models.

Fourth, KAI MEDTECH prioritizes investment in and development of its R&D and production capabilities. As an innovation-driven enterprise, KAI MEDTECH allocates the majority of its funds to product research and development as well as production capacity building, aiming to secure a competitive advantage through innovative medical devices. Currently, KAI MEDTECH has established excellent R&D and quality regulatory teams. R&D personnel account for 48.5% of the company’s total workforce, while quality and regulatory professionals make up 27%, bringing the combined proportion to approximately 75.5%.

Fifth, the founding team of KAI MEDTECH possesses years of industry experience and a track record of successful entrepreneurial ventures. For instance, Joshua Benjamin, CTO of KAI MEDTECH, previously served as an R&D Engineer at MindFrame, where he led the development of multiple products including balloon catheters and mechanical thrombectomy devices; MindFrame was acquired by Covidien (now Medtronic) for $75 million. He also served as R&D Director at Blockade Medical, leading the development of neurointerventional products; Blockade Medical was acquired by Balt for $40 million.

Leveraging these advantages, KAI MEDTECH has attracted significant investor attention since its inception.

According to Liu An, KAI MEDTECH has established a global footprint with three operating entities: Shanghai KAI MEDTECH, its U.S. R&D Center, and Hangzhou Ansheng Medical. These three enterprises collaborate synergistically, complement one another, share resources, and pursue common development.

Shanghai KAI MEDTECH is primarily responsible for the research, development, and commercialization of neurointerventional products. Currently, Shanghai KAI MEDTECH has established a 2,000-square-meter facility for R&D, production, and office operations, and has obtained ISO 13485 certification. Liu An stated, “We position Shanghai KAI MEDTECH as our core development company for the next three to five years.”

Another operating entity is the R&D center located in the United States, which is primarily responsible for R&D innovation, patent layout, preliminary design, and business development. Liu An stated, “The United States possesses advantages over other regions in terms of professional talent, advanced technology, industrial chains, supply chains, and innovation models. The establishment of the R&D center in the United States aims to fully leverage these resources to drive product R&D and innovation. Once products are developed in the United States, KAI MEDTECH will commercialize them by leveraging China’s advantages in capital, policy, cost, and industrialization.”

The third operating entity is Hangzhou Ansheng Medical, a medical device innovation incubation center based in Hangzhou, jointly established by KAI MEDTECH and Tigermed. It is primarily responsible for incubating intervention-related products. Currently, Hangzhou Jietong Ansheng has completed the construction of 1,600 square meters of R&D, production, and office space. Targeting unmet clinical needs, this incubation center introduces innovative projects through independent R&D, overseas acquisitions, and licensing collaborations. According to reports, Hangzhou Jietong Ansheng has successfully incubated multiple independently developed products as well as products introduced from overseas.

Liu An told VCBeat, “At present, Shanghai KAI MEDTECH, its U.S. R&D center, and Hangzhou Ansheng Medical are enhancing management efficiency and reducing operational costs through resource sharing. For instance, the R&D, production, procurement, and management operations systems of the three entities collaborate, complement each other, and develop together.”

Another distinguishing feature of KAI MEDTECH lies in its proactive innovation of business and operational models. For instance, KAI MEDTECH introduces advanced overseas technologies and innovative products through licensing or acquiring overseas assets, thereby accelerating the deployment of its product portfolio.

In Liu An’s view, there are many high-quality innovative products overseas that have not yet entered the Chinese market but could greatly benefit Chinese patients. Therefore, Liu An hopes that KAI MEDTECH will introduce such innovative products through business development models to better serve Chinese patients. Meanwhile, the business development model also serves as a means to accelerate the company’s product portfolio strategy.

While the business development model offers significant advantages, it also presents numerous challenges. First, identifying high-quality targets that align with a company’s current stage of development from a large pool of candidates is difficult. Second, business development collaborations are protracted and fraught with uncertainty. Third, business negotiations pose substantial challenges, requiring careful consideration of multiple factors such as product innovation, technological barriers, corporate culture, team dynamics, and return on investment. Fourth, cross-border partnerships require a strong foundation of trust. Fifth, post-collaboration, companies face high demands on various capabilities, including R&D, commercialization, product implementation, and project integration.

For KAI MEDTECH, founder and CEO Liu An worked in the U.S. medical device industry for over a decade, gaining extensive exposure to innovative medical device companies; CTO Joshua Benjamin brings years of experience in neurointervention, along with rich overseas physician networks and professional connections, laying a solid foundation for inter-organizational trust; furthermore, KAI MEDTECH’s establishment of an incubation center demonstrates its strong capabilities in R&D, implementation, and commercialization.

Liu An emphasized, “KAI MEDTECH centers on independent R&D, accelerates product deployment through business development models, and drives the building of a platform-based company.”

Finally, Liu An told VCBeat, “KAI MEDTECH is undertaking a new round of financing, planning to raise RMB 150–200 million for product development, project incubation, clinical trials, business expansion, and other purposes.”