Chinese brain interface startup Gestala has raised $21 million just two months after its launch

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

Gestala raised $21.6 million (RMB 150 million) just two months after launch, at a valuation between $100 million and $200 million, founder and CEO Phoenix Peng told TechCrunch.

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

This is the largest early-stage financing in the BCI industry in China. Ping will use the funds for research and development, expanding the team from 15 to about 35 employees by the end of the year, and building a manufacturing facility in China. The three-month-old startup aims to complete its first generation model by the end of the year.

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

Ping believes that ultrasound could represent the next generation of brain-computer interface technology, providing broader access to the entire brain and new ways of interacting with neural activity.

The founder says non-invasive ultrasound could address one of the biggest barriers to BCI adoption: the risks associated with brain surgery. Compared to implanted electrode systems, this technology can monitor a larger portion of the brain, including deep neural circuits. Using phased ultrasound, the system can also precisely stimulate or suppress neural activity without the need for surgery, he explained.

Despite rising geopolitical tensions, Peng remains hopeful that the United States and China can cooperate on deep technology research.

“Both countries have different strengths,” Peng said. “China offers extensive clinical research capacity and efficient supply chains, while the United States has world-class scientific talent.” He stated that joint efforts could also focus on building large clinical datasets to support global neuroscience research.

The company is exploring several uses for its technology. Medically speaking, chronic pain management is the startup’s main program. Chronic pain affects large populations in both the United States and China, Peng said, and current academic studies suggest that ultrasound stimulation can significantly reduce pain levels.

The startup is also studying applications related to mental health conditions, including depression, PTSD, autism, and OCD, as well as stroke rehabilitation. Other long-term targets include Alzheimer’s disease, essential tremor, and Parkinson’s disease. In total, the company is looking at six to eight potential indications, although most are still in early-stage research and not in clinical trials.

Gestalla says its advantage over global competitors comes down to speed and scale. By leveraging China’s integrated industrial ecosystem, the startup believes it can move from development to production faster than many international competitors.

The company is also working with major Chinese hospitals to accelerate clinical trials at much lower costs – roughly 20% to 33% of similar studies in the US or Europe. Meanwhile, Gestala is building what it calls the “Ultrasound Brain Bank,” a large clinical dataset designed to train AI models to decode brain signals and support future neurodiagnostics.