Hong Kong-based Cornerstone Robotics is set to raise over 500 million yuan (US$70 million) this year to expand sales and develop new products, according to CEO Samuel Au Kwok-wai.

Founded in 2019, the company is headquartered at the Hong Kong Science and Technology Park and employs over 200 engineers.

Its manufacturing plant in Shenzhen can produce up to 200 robotic surgical systems annually, sourcing components domestically to enhance reliability and manage costs.

Cornerstone’s robotic systems are designed for minimally invasive surgeries and have been used in around 250 procedures so far.

The company has started clinical trials in the UK, alongside ongoing trials in Hong Kong and mainland China.

In 2023, Cornerstone raised about 800 million yuan (US$111.36 million) and secured over 500 million yuan(US$69.60 million) in a series-C round led by Swedish private equity firm EQT.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ The surgical robotics market is undergoing a major competitive shift after two decades of da Vinci dominance

Cornerstone Robotics is entering a market that has been dominated by Intuitive Surgical’s da Vinci system since 2000, which has performed over 14 million procedures globally1.

This dominance stems from Intuitive’s early market consolidation, particularly after their 2003 merger with Computer Motion, which eliminated their main competitor at the time2.

The expiration of key da Vinci patents has opened the door for new competitors like Cornerstone, with the global surgical robotics market projected to grow from $11.48 billion in 2024 to $23.13 billion by 20303.

This growth potential is substantial considering that only 5% of the 45 million minimally invasive surgeries performed annually use robotic assistance, as Samuel Au highlighted in the article.

New entrants face the dual challenge of technical development and market penetration in a field where Intuitive has established over 8,000 da Vinci systems worldwide, creating significant switching costs for hospitals1.

2️⃣ Local supply chain control has become a strategic advantage in surgical robotics

Cornerstone’s emphasis on local supply chain control predated but ultimately aligned with major global disruptions, reflecting strategic foresight in their approach.

The complexity of surgical robots is immense, with Cornerstone’s systems containing approximately 13,000 parts that must work with precision in life-critical applications.

Their Shenzhen manufacturing facility’s capacity of 200 systems annually positions them competitively in a market where Intuitive Surgical reported installing 1,370 da Vinci systems globally in 20234.

This localization strategy reflects broader trends in medical device manufacturing, where supply chain resilience has become crucial following COVID-19 disruptions and geopolitical tensions.

The approach allows Cornerstone to offer systems at “substantially lower” prices while maintaining performance comparable to market leaders, addressing a key barrier to wider adoption of surgical robotics.

3️⃣ Regulatory approval pathways dictate global expansion strategies for surgical robotics firms

Cornerstone’s sequential regulatory approach—clinical trials in Hong Kong, approval in mainland China, and pursuit of CE certification for European markets—follows a pattern common among medical device startups.

Research shows that of 21 companies with 23 different robotic platforms, only 13 have achieved regulatory approval of any kind, illustrating the significant hurdle that certification represents5.

The CE mark that Cornerstone is pursuing by year-end is particularly significant as it would open access to the European market, the second-largest medical device market globally after the United States.

This regulatory milestone is crucial for investor confidence, as shown by Cornerstone’s ability to secure over 500 million yuan in their latest funding round led by Swedish firm EQT, which likely values the potential European market access.

The company’s focus on multiple geographies reflects the increasingly global nature of the surgical robotics market, where regional regulatory approvals can significantly impact valuation and market penetration.

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