Chinese brainstorming startup Gestala raises $21M just two months after launch

Elon Musk’s Neuralink and OpenAI-backed Merge Labs are advancing brain-computer interface (BCI) technology in the US Meanwhile, Chinese entrepreneur Phoenix Peng is building rival efforts through two startups: NeuroXess, which develops implantable BCI systems, and a second company, Gestala, which makes non-invasive BCI-based ultrasounds.

Gestala raised $21.6 million (CN¥150 million) just two months after launching, at a valuation of $100 million to $200 million, founder and CEO Phoenix Peng told TechCrunch.

The round, co-led by Guosheng Capital and Dalton Venture with participation from Tsing Song Capital, Gobi Ventures, Fourier Intelligence, Liepin and Seas Capital, was oversubscribed, with investor commitments reaching more than $58 million, Peng added.

This is the largest initial investment in China’s BCI industry. Peng will use the money for R&D, expand the team from 15 employees to 35 by the end of the year, and build a manufacturing facility in China. The three-month-old program aims to complete its first generation model by the end of the year.

The global BCI industry is currently experiencing an increase in investment in ultrasound technology. Gestala is the first ultrasound BCI company in China, although not the first in the world. Several ultrasound BCI startups have emerged in the US in recent years, including Merge Labs, which is among the largest.

Peng believes that ultrasound may represent the next generation of brain-computer interaction technology, enabling broader, whole-brain access and new ways to communicate neural activity.

The inventor says that non-invasive ultrasound can address one of the biggest obstacles to BCI adoption: the risks associated with brain surgery. Compared to implanted electrode systems, the technology can monitor a large part of the brain, including deep neural circuits. Using ultrasound-array ultrasound, the system can also directly stimulate or suppress neural activity without the need for surgery, he explained.

Despite the escalation of the country’s tensions, Peng still hopes that the US and China can cooperate in deep technological research.

“Both countries bring different strengths,” Peng said. “China offers great clinical research capabilities and efficient supply chains, while the US has world-class scientific talent.” Joint efforts could also focus on building large-scale clinical knowledge to support global neuroscience research, he said.

The company is exploring multiple uses for its technology. Medically, chronic pain management is a top priority. Chronic pain affects many people in the US and China, and existing academic studies suggest that ultrasound stimulation can significantly reduce pain levels, Peng said.

The startup is also studying applications in mental health conditions, including depression, PTSD, autism and OCD, and stroke rehabilitation. Other long-term targets include Alzheimer’s disease, essential tremors and Parkinson’s disease. In total, the company is researching six to eight potential indications, although most are in the early stages of research rather than clinical trials.

Gestala says its advantage over global competitors comes down to speed and scale. Using China’s integrated manufacturing system, the startup believes it can move from development to production faster than many international competitors.

The company also works with major Chinese hospitals to accelerate clinical trials at very low costs – about 20% to 33% of similar studies in the US or Europe. At the same time, Gestala is building what it calls the “Ultrasound Brain Bank,” a large clinical dataset designed to train AI models to determine brain signals and support future neurological diagnoses.