BrainCo raised $280M from IDG Capital and Walden International to build non-invasive brain-computer interfaces. The Chinese startup's bet: mass-market neural tech won't require opening the skull.
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BrainCo, a Chinese startup born out of Harvard Innovation Labs, has raised 2 billion yuan ($280 million) in a round co-led by IDG Capital and Walden International, the venture firm founded by Intel CEO Lip-Bu Tan. The company is betting that the future of brain-computer interfaces lies outside the skull.
Elon Musk's Neuralink has drawn attention with its implanted devices, which require opening the skull to read neural signals. BrainCo takes a different path. Its bionic hands, approved by the U.S. Food and Drug Administration, read an amputee's neural and muscular electrical signals through the skin. The company also sells a wearable sleep aid that uses low-intensity electrical pulses to stimulate stress-relief neurochemicals.
BrainCo partner and senior vice president Nyx He told CNBC that the two approaches solve different problems. Some conditions require going into the brain, she said. Many others, particularly where drugs fall short, can be served by non-invasive methods that are easier for people to accept and access, at lower risk and cost.
The core challenge for non-invasive BCI is signal quality. Brain signals are subtle and noisy when read from outside the skull. BrainCo developed a dry electrode sensor to capture them and an AI algorithm to decode them. He outlined a three-stage roadmap: start with those who need the technology most, such as amputees in markets covered by insurance; expand into medical conditions like ADHD and depression; then target the mass market with consumer electronics. Eventually, BrainCo plans to license its BCI platform to other companies, a business she expects to become the company's largest revenue driver.
BrainCo's non-invasive approach gains credibility if its dry electrode sensors and AI decoding algorithm can match the signal clarity of implants for a wide range of applications. Jefferies, in a July 8 report, said conventional non-invasive systems remain constrained by how clearly they can capture and interpret brain signals. The bank added that BrainCo's proprietary sensors, AI decoding algorithm and commercialization record give the company an edge.
Success would also require consumer adoption. He said the company does not collect customer data; it is stored on users' devices, not transmitted to the cloud and erased after each use. That privacy stance could help overcome concerns about intimate personal data.
Some investors argue only implants can deliver. Alex Zhavoronkov, CEO of biotech firm Insilico Medicine, said non-invasive BCI is like trying to capture light in distant galaxies. If BrainCo's sensors cannot achieve sufficient signal-to-noise ratio for complex applications, the company may be limited to simple medical devices and sleep aids.
Geopolitical risk is another factor. Like AI and semiconductors before it, BCI could become a flashpoint as it matures. Performance-enhancing uses also raise ethical considerations. He brushed aside the politics, saying the company's goal is to deliver solutions to those in need, whether in China or the U.S. "I don't think I'll stop at borders for that."
Rui Ma, founder of Tech Buzz China, said that while today's proven BCI applications can dramatically improve quality of life for severely impaired patients, the far bigger market likely lies in augmenting human capabilities. She added: "I don't think anyone is remotely close to realizing that. Augmentation is like sci-fi at this point."
Thomas Tsao, cofounder of Gobi Partners, which has invested in ultrasound-based BCI startup Gestala, said growing investment could help the industry reach a tipping point. He added its ultimate market size is virtually impossible to quantify, with many future use cases hard to imagine today.
For now, China's BCI market is taking off first in non-invasive rehabilitation technologies, Jefferies said, which face lower regulatory and clinical barriers. BrainCo's next test will be whether it can move beyond medical applications into the mass market without the signal clarity that implants promise.{
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