► The rehabilitation robotics company has primarily been gearing up to address needs for higher-quality rehabilitation services that arise from China’s aging population —set to reach 340 million by 2040. 

► It is designing its own chips, hence keeping costs relatively under control, in its quest to provide a cheaper and smarter alternative to conventional rehabilitation as we know it.

The socio-economic paradigm shifts brought by changing demographics have long been observed in the high-income Western European counties and Japan. But it did not become a matter of debate in the emerging world until the beginning of the 21st century.

Aging population has already started to shape the way governments in both high-income and emerging economies devise and implement macroeconomic and social security policies.

Multinational retail and healthcare heavyweights in Europe have long been taking advantage of opportunities presented by these demographic shifts with constant resource deployment. 

Yet in Asia, the business world is sort of slow in exploring related business opportunities.

Japan is an exception as the country is home to one of the world’s most aging societies, which breeds a lot of entrepreneurial activities surrounding senior care and rehabilitation. Over the years, China has been rapidly catching up, attracting business leaders’ attention with its gigantic aging population and expanding middle class.

Within this context, we shed light on the Shanghai-based rehabilitation robotics maker Fourier Intelligence to learn more about the future of medical services such as exoskeletons.

A robotics startup navigating the winds of change

The firm first drew EqualOcean’s attention when it secured its Series B financing round from a number of Chinese investors in July 2019. After the firm had announced the completion of its Series B+ round on May 7 2020, we talked to the firm’s cofounder and chief strategy officer (CSO) Zen Koh to gain a deeper understanding of Fourier Intelligence’s business.

“We are going to rely on the traditional rehab method and we will still be paying for the machines for each patient, and we will still have to book at least one person to operate each of those machines. Meanwhile, we are going to afford this massive population’s rehab expenses with these conventional methods — It doesn’t make sense, right?” he explained the underlying logic behind the market need for Fourier Intelligence’s robots. “Human, space, and costs: Our devices disrupt everything at once.” Zen Koh, Chief Strategy Officer of Fourier Intelligence

However, no robotics and medical device giant has invested heavily in this seemingly-revolutionary and cost-effective solution yet. There are numerous early-stage firms in the field. 

Zen Koh, thinks the giants are eyeing “the right moment” to enter the field. “Companies like Toyota, Honda and others, they have been developing exoskeleton technologies for elderly patients for years, yet their core businesses are irrelevant to rehab robotics, and they do not direct their full attention to understand the market and patient need in this field,” says the CSO.

Some of those “big names” have already approached Fourier Intelligence with inquiries about a possible acquisition deal, Zen Koh said while declining to give names.

What does this medical exoskeleton maker bet on?

Growing market demand and its core technology. 

The firm describes itself as a “technology-driven” company, so we asked about their chips — the largest portion of its robots’ costs. “Semiconductors used to be the largest barrier for us, hindering our ability to produce affordable exoskeletons,” the cofounder said. “We used to buy our chips from foreign companies for thousands of dollars each. 

“Then we started to design our own memory management unit (MMU) and tailored that for our rehab exoskeletons, which require less sophistication compared to industrial robot MMUs as ours move slower,” explained Zen Koh. 

“The cost of our chips has slumped from thousands of dollars to around a hundred Chinese yuan,” said the cofounder.

Like other makers of these robotics, Fourier Intelligence has been selling or leasing devices that enable individuals with neurological conditions to rehabilitate, and in some cases, to walk and move again. Thus their target is mainly to serve the elderly. While markets like Japan and some Western European counties present lucrative opportunities, China is more like a long-term investment.

“Our firm’s management and R&D teams are located in China. Right now China is the best target for us, and got our full focus,” said Koh.

Indeed, China tends to be overlooked when it comes to tech ventures servicing the aging population. The country will have around 343 million people who are over 65 years of age by 2040 according to United Nations projections. That translates into a 60 percent jump in the old-age dependency ratio from the level in 2020.

Meanwhile, it remains a mystery whether China will be able to afford the socio-economic costs from a staggeringly higher dependency ratio. This begs the oft-cited question of whether China will get rich before it gets old.

No doubt, unprecedented socio-economic conditions will make it a necessity for innovation in healthcare to play a bigger role. A massive demand and cheaper technology are what Fourier Intelligence has been betting on in China.

The market is far from mature, and a handful of players already dominate the global arena

The medical technologies and industrial robotics space is characterized by intense competition, rapid technological iterations and high regulatory hurdles. Besides robotics, healthcare and electronics giants who operate across industries, there are a handful of publicly-traded medical robotics-focused companies that generate most of their revenues from rehab exoskeletons.

Ekso Bionics (EKSO:NASDAQ), one of the largest players in rehab robotics, reported a robust growth performance in the last few years. Despite being a pioneer in the field in terms of revenue generation, Ekso’s revenue has just crossed USD 13 million mark in 2019. The industry is still nascent. However, Fourier Intelligence has a major advantage -- the market size – as it is at the forefront of trying to cash in on one of the world’s most dramatic demographic shifts.

Rehabilitation robotics specifically focuses on systems —devices, application scenarios, and control strategies—that are aimed at facilitating the recovery of impaired sensory, motor, and cognitive skills. Therefore, regulatory clearance is essential and it is an issue that we believe is key to  Fourier Intelligence’s future. The company’s products are designated/classified as second-class medical devices, and the firm has landed certificates from regulators in the US, EU, Australia, China and Singapore. 

“We have a dozen or more different products and they progressed differently in different countries in terms of permits and clearances, and at the moment we don’t have any major regulatory problem that stops us from engaging in our operations and sales,” the cofounder said.

In light of the current market size, minuscule sales revenues,, premature technologies, and a stringent regulatory environment, it is a question to what extent these technologies will be included in the healthcare reimbursement systems of different countries and whether insurance companies are willing to provide cover. Therefore, we believe, correct strategic cooperation will be of utmost importance to Fourier Intelligence, as it might insulate the firm from short-term volatilities in the market. 

The firm has signed agreements to work with a number of research institutions and hospitals, counting Shirley Ryan AbilityLab in the US, the University of Melbourne in Australia and ETH Zurich in Switzerland among its main partners and clients, EqualOcean has learned.

“We want to revolutionize rehabilitation and elderly care; we do not doubt our value in the long term and are open to cooperate with any ‘giant’ who shares similar values with us,” says Koh.