NewCloud Medical Secures Tens of Millions in Series B+ Funding Led by Dalton Ventures to Advance Innovative Chronic Pain Devices and Neuromodulation Solutions

Chronic pain, as an independent disease, affects over 300 million people in China, with the pain-afflicted population trending younger, indicating a huge market demand.It is predicted that the scale of the pain management market in China will exceed 500 billion yuan by 2025.At the same time, the field of chronic pain treatment is in urgent need of new concepts and solutions to break through the limitations of traditional drugs and surgeries, addressing the significant unmet needs in clinical practice.

Against this background,Comprehensive Solution Provider for Innovative Devices in Chronic Pain —— New Cloud Medical Technology Co., Ltd. (hereinafter referred to as "New Cloud Medical") announced the completion of its B+ round of financing., this round of financing was led by Dalton Venture.

New Cloud Medical, established in 2016, focuses on utilizing medical technology to address the challenges in chronic pain treatment. Through an integrated "industry-academia-research-application" model, the company drives continuous innovation in its product pipeline—from non-invasive transcutaneous electrical stimulation devices to minimally invasive interventional instruments and active implantable devices. Multiple products have broken the technological monopolies held by foreign companies in related fields, achieving revolutionary breakthroughs in cutting-edge technologies such as AI closed-loop spinal cord stimulation. These innovations will provide precise, safe, and effective treatment options for patients with chronic pain. This round of financing has brought New Cloud Medical new capital support and once again demonstrated the capital market's confidence in the company’s commercialization capabilities.

Dalton Venture Partner Lin Zhencheng stated"With the accelerated arrival of an aging society, the demand for chronic pain diagnosis and treatment is showing rigid growth. New Cloud Medical has long been deeply engaged in the field of pain management. Relying on differentiated technical layouts and efficient product development capabilities, the company has developed several innovative pain management devices, such as closed-loop spinal nerve stimulators and minimally invasive kits for ligamentum flavum resection, significantly improving the accessibility of advanced pain treatment technologies. We firmly believe in the potential of New Cloud Medical to continuously bring breakthrough solutions to the industry and will support the company over the long term in promoting its innovative products in the global market."

Chronic pain includes conditions such as postherpetic neuralgia, chronic low back pain, and diabetic neuropathic pain. With the increasing degree of societal aging, the incidence rate continues to rise, imposing a heavy burden on both society and individuals. In the United States, the annual burden caused by chronic pain amounts to $635 billion, far exceeding that of cardiovascular diseases and cancer. In China, the number of inpatients related to chronic pain reached 26.15 million cases in 2023, with the number of patients treated in pain departments alone increasing by 35.1%.

"From the perspective of human development, pain is an eternal topic, especially as people's quality of life improves, pain issues have become very prominent. Chinese enterprises using cutting-edge technology to address pain problems can help reduce social burdens and cut household expenses," said Zhao Yun, founder & CEO of New Cloud Medical, when discussing the significance of targeting the pain management sector.

The Chinese government's emphasis on pain management is continuously increasing. Starting from 2023, a comprehensive pain management model is being promoted nationwide, alongside the development of pain departments. According to incomplete statistics, the coverage rate of pain departments in tertiary hospitals has reached 92.7%. Chronic pain has also been included in chronic disease management, along with hypertension and diabetes.

However, there is a notable contradiction in the field of chronic pain: despite hundreds of treatment methods being proposed, some patients still do not achieve effective pain relief. Take neuropathic pain as an example, which is a common type of refractory pain primarily treated with medication in clinical practice, yet about 50% of patients cannot achieve adequate pain relief. The potential market for pain management is vast, and more effective analgesic methods are an essential clinical need. New Cloud Medical addresses this clinical challenge by developing a series of products with technological differentiation advantages in minimally invasive interventions and neuromodulation, further enhancing clinical pain relief outcomes.

Spinal Cord Stimulation (SCS) is the most commonly used neuromodulation technique for pain treatment. By implanting electrodes into the epidural space of the spinal cord and using electrical currents to stimulate the spinal cord, SCS blocks pain signals from reaching the brain, thereby achieving pain relief. Compared with drug therapy, SCS has advantages such as being reversible and free of side effects, making it one of the core technologies in pain management. Currently, the annual number of SCS surgeries in China is about 2,000 cases (with a permanent implantation rate of approximately 20%-30%), compared to 50,000-70,000 cases annually in the United States (with a permanent implantation rate exceeding 60%), indicating significant room for growth in penetration.

However, the global SCS field is almost monopolized by foreign giants (such as Medtronic, Boston Scientific, and Abbott), with the cutting-edge closed-loop technology being heavily guarded. The existing open-loop SCS in China, due to its fixed-output stimulation and reliance on manual subjective parameter adjustments, struggles to meet patients' stimulation needs during daily activities, resulting in low and unstable clinical efficacy.

With the rapid iteration of technology, especially the leapfrog development of AI in the medical field, New Cloud Medical seized the opportunity to deeply integrate AI, spinal cord interfaces, and other technologies. It innovatively developed China's first "AI closed-loop implantable rechargeable spinal cord stimulation system, NewStim®." NewStim® has undergone systematic upgrades in both software and hardware technology. It can automatically adjust stimulation parameters based on real-time measurements of evoked compound action potential (ECAP) signals, ensuring that the number of nerve fibers activated by electrical pulses in the human pain area remains at an appropriate level. This ensures patients receive stable and effective pain relief across different body positions and activities.

The emergence of NewStim® has broken the long-term monopoly of foreign enterprises on the SCS technology frontier, announcing that China's SCS technology has entered a world-leading level.

When asked why he chose closed-loop technology, Zhao Yun explained: "We want to keep an open mind and stay at the forefront of technology to improve efficacy and quality of life. Spinal nerve signals are an important 'data pool' in the human body. By using AI closed-loop technology to sense neural signals, we can listen to the interactive dialogue between electrical stimulation and the spinal cord, allowing for precise regulation. This signal measurement can occur over 4 million times per day, meaning even subtle changes in activities such as breathing and heartbeat can be sensitively captured, enabling precise and personalized pain treatment."

In addition, patients with permanent SCS implants originally had to return to the hospital regularly for parameter adjustments. HoweverWith the support of AI, third-party platforms and hospitals can efficiently carry out preoperative planning and postoperative management for patients. Real-time parameter adjustments can also be completed remotely, effectively reducing the workload of doctors and improving patient treatment compliance. On the other hand, the biggest contribution of AI to closed-loop SCS systems lies in continuously accumulating sample databases through group data, completing the construction of model libraries, and ultimately feeding back into the AI model to continuously iterate the system.

In addition to neuromodulation products, New Cloud Medical has independently developed the "NewMild® Disposable Lumbar Spinal Stenosis Minimally Invasive Decompression Kit," which is the first domestic device used for percutaneous image-guided lumbar decompression (PILD) surgery in China. The clinical trial of this product has been initiated in the most influential pain department at domestic hospitals, indicating that New Cloud Medical has provided significant technical support for formally introducing PILD surgery in China, benefiting more patients with lumbar spinal stenosis.

"Our R&D innovation lies in the application of the 'industry-academia-research-medical use' model, which is also our core competitiveness," Zhao Yun introduced. The so-called "industry-academia-research-medical use" refers to in-depth cooperation with well-known hospitals, universities, and scientific research institutions both domestically and internationally, creating a "five-in-one" model driven by scientific research, engineering R&D transformation, industrial application, clinical verification and feedback, and user scenario orientation, to ensure continuous innovation capabilities and gain a competitive edge in the market. Currently, New Cloud Medical has jointly undertaken the Beijing Science and Technology Plan project "Research and Development of AI Closed-loop Implantable Spinal Cord Stimulator" with the Institute of Electrical Engineering of the Chinese Academy of Sciences and the China Rehabilitation Research Center. It has also collaborated with Beijing University of Chemical Technology to develop multiple new medical materials.

Against the backdrop of globalization, "going global" is an inevitable trend for the development of Chinese enterprises and is also within the future plans of New Cloud Medical. After the completion of this round of financing, the company will focus on investing in the following directions:

1) Product Route: Advance the R&D progress of products such as NewStim® and NewMild®, further expand the technical coverage of neuromodulation products (such as peripheral nerve electrical stimulation products), and promote product registration and market launch through innovative channels (special review channel for medical devices);

2) Technical Deep Cultivation: Based on the principle of "no dispersion, focus on specialization," we will concentrate our advantages to create precision chronic pain management products.

3) Global Layout: Promote the clinical trials and registration of neuromodulation products in the United States, allowing domestically-produced pain treatment devices to reach the global stage.

In the future, New Cloud Medical also hopes to gradually establish a pain education system for patients and doctors worldwide, raising public awareness of pain and treatment options. "The development of this industry is closely related to education. If people realize that they should not endure pain and understand advanced technologies for pain treatment, the entire industry can further develop. Therefore, our mission is 'dedicated to providing products and services to free humanity from pain.' This is not just about offering products; it also involves integrating services like education to truly achieve the goal of 'eliminating pain.'" Zhao Yun explained the meaning behind the company's mission and expressed greater "ambition" for the future — to become the standard-setter and ecosystem leader in the field of chronic pain.