China’s BrainCo raises $280mn as wearable brain tech gains policy backing

BrainCo has raised 2 billion yuan, or about $280 million, as the Hangzhou company builds prosthetics and wearable brain-computer interface products without surgical implants. CNBC reported that the round was co-led by IDG Capital and Walden International, the venture firm founded by Intel chief executive Lip-Bu Tan, underscoring growing investor interest in a field still far smaller than artificial intelligence.

Brain-computer interfaces, or BCIs, convert brain signals into commands that can control external devices. The sector has drawn attention through implant companies such as Elon Musk’s Neuralink, which is developing devices placed in the skull for people with disabilities, but BrainCo is pursuing a less invasive route through sensors, prosthetics and wearable devices.

The company, founded in 2015 after emerging from Harvard Innovation Labs, is one of Hangzhou’s so-called “six little dragons” of technology startups, according to CNBC. Its products include bionic hands cleared by the U.S. Food and Drug Administration. The hands interpret neural and muscular electrical signals from amputees and turn intended movements into finger actions.

BrainCo also makes wearable products, including a sleep device that the company says uses low-intensity electrical pulses to stimulate neurochemicals linked to stress relief. Nyx He, BrainCo partner and senior vice president, told CNBC that implants and non-invasive systems address different needs. Some conditions require direct access to the brain, she said, while other uses may be better served by devices that carry lower cost, lower risk and wider user acceptance.

How the non-invasive model works

Non-invasive BCI systems face a technical constraint: brain signals are weak and noisy when captured from outside the skull. He told CNBC that BrainCo has developed a dry electrode sensor to collect those signals and an artificial intelligence algorithm to interpret them.

The company’s commercial plan begins with patients who have the clearest need, including amputees in insurance-covered markets, He said. BrainCo then aims to address medical conditions such as ADHD and depression before moving into consumer electronics. Over time, it plans to license its BCI platform to other companies, a line of business He said could become its largest revenue source.

Rui Ma, founder of Tech Buzz China, told CNBC that current BCI applications can materially improve life for severely impaired patients. She said the larger market would be technology that augments human capabilities, but added that such uses remain far from commercial reality.

China puts BCI into industrial policy

China has elevated neurotechnology in national planning. CNBC reported that BCI appears in the country’s latest Five-Year Plan as a strategic future industry. Seven Chinese ministries issued an implementation plan for the industry last August, with targets for key technology advances by 2027, and Anhui province published a plan in June to accelerate research, production and industrialization.

Regulators have also approved a minimally invasive BCI device from Neuracle Medical Technology for commercial use to help restore some hand function after spinal cord injury, according to CNBC. Other Chinese companies, including StairMed and NeuroXess, are working on implants, while Gestala is pursuing ultrasound-based approaches.

Jefferies said in a July 8 report that China’s BCI market is developing first in non-invasive rehabilitation technologies, which face fewer clinical and regulatory hurdles. The bank described invasive implants and ultrasound systems as among the most promising areas, while saying conventional non-invasive systems remain limited by signal clarity. It also cited BrainCo’s sensors, decoding software and commercial record as advantages.

Paul Triolo, a partner at DGA-Albright Stonebridge Group, told CNBC that Beijing is treating BCI as part of a broader supply-chain strategy, spanning areas such as stroke rehabilitation, prosthetics and cognitive assessment. Shanghai has linked BCI startups with Huashan Hospital, and Chinese health authorities created a separate insurance category for BCI last year, CNBC reported.

The technology also raises privacy and geopolitical questions as devices collect intimate neurological data. He told CNBC that BrainCo does not collect customer data, stores information on users’ devices rather than in the cloud, and deletes it after each use. She said the company’s aim is to provide products to people who need them in China, the U.S. and elsewhere.

This story draws on original reporting from CNBC.