BrainCo, a brain-computer interface startup based in Hangzhou, aims to compete with Elon Musk’s Neuralink, is in talks to raise about US$100 million in pre-IPO funding at a valuation above US$1.3 billion, according to sources.

The company, known in China as Zhejiang Qiangnao Technology Co., develops bionic limbs and brain-controlled computing technologies.

Founded in 2015 by Han Bicheng, BrainCo is reportedly preparing for a potential IPO in Hong Kong or mainland China, though no final decision on the venue has been made.

Negotiations around the fundraising and IPO details are ongoing and may change based on market conditions.

BrainCo is part of a group of Chinese tech startups that have attracted increased investor attention, alongside firms such as DeepSeek and Manus.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Successful tech pivots can emerge from regulatory and social resistance

BrainCo’s journey illustrates how startups can transform setbacks into opportunities by redirecting their core technology toward different markets.

The company initially focused on educational applications, deploying EEG headbands in Chinese schools to monitor student attention levels and selling 20,000 devices by 20171. However, this approach faced significant backlash from parents concerned about privacy and surveillance, leading schools to halt trials in 20192.

Rather than abandon their brain-computer interface technology, BrainCo pivoted toward medical applications, now developing “bionic limbs and technologies for human brains to control computers” and positioning itself as a Neuralink competitor3.

This strategic shift demonstrates how companies can leverage existing R&D investments when their original market proves problematic, transforming from a controversial educational tool company into a potential medical technology leader.

2️⃣ Investor appetite for brain-computer interfaces remains strong despite past controversies

BrainCo’s valuation trajectory reveals how investors separate promising core technology from problematic early applications.

Despite the educational surveillance controversies that forced school trial shutdowns, the company is now seeking $100 million in pre-IPO funding at a valuation exceeding $1.3 billion3. This represents a dramatic increase from their earlier funding rounds of $5.5 million in 2017 and $15 million by 201945.

The company’s inclusion among China’s “Six Little Dragons” signals that investors view BrainCo’s pivot toward medical brain-computer interfaces as positioning it in a high-growth sector3.

This valuation resilience suggests that while consumer and regulatory resistance can derail specific product applications, underlying technology platforms in emerging fields like brain-computer interfaces continue to attract significant investor interest when redirected toward more accepted use cases.

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