Siduo Medical Completes Tens of Millions of RMB Series A Financing Led by Puhua Capital and Followed by Zhonghai Investment

VCBeat (WeChat ID: vcbeat) has exclusively learned that Chengdu Stork Healthcare Co., Ltd. (“Stork”), a domestic company specializing in the ultrasound field, has announced the completion of its tens-of-millions-yuan Series A financing round. The round was led by Puhua Capital, with participation from Zhonghai Investment and other investors, while existing shareholder PURPLE COW STARTUPS continued to support the company. Probe Capital continued to serve as Stork’s long-term exclusive financial advisor.

In June 2018, Chengdu Stork Healthcare Co.,Ltd. secured an exclusive angel round of financing from PURPLE COW STARTUPS. This means that amid the capital winter, Chengdu Stork Healthcare Co.,Ltd.'s current financing round was completed less than six months after its previous angel round.

Chengdu Stork Healthcare Co., Ltd. was established in June 2016 by a seasoned R&D and sales team specializing in the ultrasound field. Dr. Liu Xiyao, the company’s founder and chairman, brings over a decade of experience in ultrasound research and industry practice, with expertise spanning medical ultrasound system design, as well as medical signal and image processing. Zhang Zhuo, co-founder and CEO, has 11 years of experience in marketing and sales within the ultrasound industry.

In just two years since its establishment, Chengdu Stork Healthcare Co., Ltd. has delivered impressive performance. Its handheld ultrasound products, in terms of both hardware and software capabilities, rival those of top-tier international manufacturers such as GE, Siemens, and Philips. In R&D innovation, the company leverages its proprietary algorithm platform to accelerate chip performance. On the distribution front, it has expanded its channel network and penetrated grassroots markets to drive incremental growth.

In the field of handheld ultrasound, algorithms and hardware determine the core competitiveness of products. The team at Chengdu Stork Healthcare Co., Ltd. possesses integrated software and hardware design and development capabilities for its underlying technology platform. It owns a proprietary ultrasound imaging platform, as well as multiple key technologies including proprietary elastography and 3D Doppler spectral imaging. Furthermore, the company has independently developed a GPU OpenCL architecture for image data processing. Such image processing technology is typically found in products from top-tier international manufacturers, such as the new high-end ultrasound systems from GE, Siemens, and Supersonic Imagine (France), whose products are generally costly. In contrast, large domestic medical ultrasound products mostly rely on CPU-based processing, which lags behind GPU-based algorithms.

Regarding the number of physical hardware channels, generally speaking, a higher number of physical channels enables the acquisition of more signal data, thereby yielding higher image resolution through computational processing. Currently, most major manufacturers of handheld ultrasound devices offer 8-channel or 24-channel systems, whereas Chengdu Stork Healthcare Co., Ltd. has achieved an exclusive patented 32-channel technology, with its next-generation products slated to reach 128 channels.

Moreover, leveraging the original elastography technology and its proprietary non-linear imaging technology, Chengdu Stork Healthcare Co., Ltd. has developed an intelligent computer-aided diagnosis (CAD) software package that provides evidence for differentiating between benign and malignant space-occupying lesions in various anatomical regions. This enables Stork to bridge the “last mile” from radiology departments to other clinical specialties, while also empowering primary care physicians with intelligent diagnostic capabilities.

Ms. Zhang Zhuo, Co-founder of Chengdu Stork Healthcare Co., Ltd., summarized to VCBeat: “Currently, our handheld ultrasound product obtained the Class II Medical Device Registration Certificate from the CFDA in 2018. Last year, on top of their annual orders worth tens of millions of yuan, major domestic medical equipment suppliers placed additional orders with us amounting to nearly ten million yuan per year. Meanwhile, leveraging the multi-scenario applicability of our products, Stork has expanded its channels to penetrate grassroots markets. These recognitions serve as the driving force behind our continuous innovation.”

“Over the next year, Zhang Zhuo stated, ‘We will primarily allocate the proceeds from this round of financing toward technology reserves, product R&D, and talent acquisition. We expect to complete the development of our AI chip and further refine the product within this year. Additionally, we plan to recruit more cross-disciplinary talents.’”

In 2019, Chengdu Stork Healthcare Co., Ltd. will launch a new generation of handheld ultrasound devices equipped with ASIC chips. Compared to current data processing algorithms, ASIC chips offer greater computational power at a lower cost. Furthermore, they can integrate AI algorithms, consolidating all ultrasound detection functions at the front end, which significantly improves data collection efficiency and enhances overall computational performance.

There are few manufacturers of handheld ultrasound devices equipped with AI, with the most prominent being Butterfly Network from the United States. In 2018, Butterfly Network raised $250 million in its Series D financing round, rapidly achieving unicorn status and ranking among the medical device companies with the largest funding amounts last year.

Chengdu Stork Healthcare Co., Ltd. is currently the only ultrasound equipment manufacturer in China capable of integrating underlying platform algorithms and artificial intelligence algorithms into ASIC chips.

Like Butterfly, Chengdu Stork Healthcare Co.,Ltd. leverages its integrated intelligent diagnostic module to move routine ultrasound applications out of standalone imaging departments and into primary care clinics and various clinical specialties, significantly expanding usage scenarios and market scale, thereby enabling more clinicians to use handheld ultrasound devices as easily as they use stethoscopes.

Li Yang, Investment Director at Puhua Capital, shared his perspective on Chengdu Stork Healthcare Co.,Ltd.: “This timing coincides with the abolition of mandatory ultrasound certification and a surge in demand for ultrasound services from both primary care institutions and specialized departments. However, competition in this industry has always been fierce, with distributors driving prices down significantly. Therefore, I believe that beyond high image quality and miniaturization, new products must develop specific functional modules tailored to different usage scenarios. These features should help reduce the learning curve for physicians and address practical challenges faced by specialists and primary care providers. Through our long-term engagement with Chengdu Stork Healthcare, we have found their product design to be uniquely innovative. Their team is comprehensive and well-rounded, demonstrating a deep understanding of sales dynamics. We are honored to collaborate with the team in exploring new applications at the intersection of ‘acoustics + medicine.’””

Chen Dongdong of Zhonghai Investment stated, “The intelligence and miniaturization of medical equipment represent a key development trend. Advances in hardware and software technologies, such as chips and artificial intelligence algorithms, have driven significant progress in handheld ultrasound devices in terms of cost reduction, power consumption optimization, image quality improvement, and enhanced computational power. This has extended accessibility beyond traditional ultrasound departments to more primary care and clinical settings, reaching broader incremental markets through disruptive innovation. The team at Chengdu Stork Healthcare Co., Ltd. boasts a solid technical foundation and extensive market experience, with rapid product iteration cycles. Zhonghai Investment is optimistic about this team’s potential to achieve strong performance in this sector.”

Yu Bo, Head of Healthcare at PURPLE COW STARTUPS, stated: “Chengdu Stork Healthcare Co.,Ltd. is a rare early-stage startup team that possesses dual barriers in both technology and business. Furthermore, PURPLE COW STARTUPS is highly optimistic about innovative medical device projects with integrated hardware and software capabilities, which is the primary reason for our decisive increase in investment during this round.”

Puhua Capital’s healthcare investment journey began in 2011. It has successfully invested in well-known enterprises and listed companies such as Hu Qing Yu Tang, Huatong Medicine (002758), and Quanyuantang (833409). The firm has conducted comprehensive and systematic investments and industrial layout in the broader healthcare sector, with a focus on precision medicine, artificial intelligence and robotics, big data, medical devices, healthcare services, informatization, and insurance, supporting more than 50 high-tech enterprises.

Puhua Healthcare Fund has been consistently ranked in authoritative industry lists over the years: it was consecutively named among the Top 20 Investment Institutions in China’s Healthcare Sector by Zero2IPO in 2018 and 2017, and ranked among the Top 10 Best Investment Institutions in the Medical Device Sector of China’s Healthcare and Health Services Industry by CVSource in 2016.

Zhonghai Investment was co-founded by Lu Zhong and Huang Haijun, former senior executives of Alibaba Group. The firm currently manages five RMB-denominated funds, maintaining a sustained focus on the internet/consumer sectors, high-tech industries, and healthcare. Its investment strategy primarily targets early-stage and growth-stage companies. Having invested in over 50 outstanding early- to mid-stage enterprises, Zhonghai Investment is committed to serving as a strategic partner for growing businesses.