The State of NeuroTech: Unlocking Minds & New Markets

Introduction

In the not-so-distant future, humanity will find itself at the precipice of a remarkable revolution. The steady march of neurotechnology has gifted us with the power to transcend our limitations and unlock the true potential of the human mind. As we merge with machines, becoming superhumans and cyborgs, a thrilling new era dawns upon us. What was science fiction yesterday becomes an imminent reality as the breakthroughs in neuroscience and artificial intelligence converge, leading to fascinating progress in all parts of NeuroTech. Welcome to the extraordinary world of the NeuroTech Revolution.

When thinking about NeuroTech, most of us imagine consumer gadgets that utilize dry electrodes to establish connections between the human brain and computers and leverage sophisticated algorithms to analyze the brain-wave data. That said, there is much more to the field, for instance, lenses to treat migraines, devices for detecting drug cravings, or NeuroModulation techniques for chronic pain relief.

In this NeuroTech Startup Report, we delve into the exciting world of NeuroTech, exploring its definition and main subcategories, the current state of technology, emerging players and models, recent VC deals and exits, as well as a path forward for the industry.

Definitions and key drivers behind NeuroTech growth

So, what is NeuroTech? In short, NeuroTech encompasses any method or electronic device which interfaces with the nervous system to monitor or modulate neural activity. The global NeuroTechnology market size was valued at $13 billion in 2022 and is projected to hit around $38 billion by 2032, growing at a CAGR of 11.5% during the forecast period 2023 to 2032. The increasing prevalence of neurological disorders, coupled with advancements in neuroscience, hardware, and AI and growing interest from investors and governments, is fueling the market expansion.

In addition, partly due to Elon Musk’s popularization of NeuroTech through his company Neuralink, there is a growing interest among consumers in improving cognitive abilities, memory, and focus. Many companies are capitalizing on this trend by developing brain-training games, wearables, and other brain-enhancement devices, creating a new market segment.

The current state of technology in the NeuroTech market is awe-inspiring. Brain-computer interfaces (BCIs) are one of the most significant breakthroughs, enabling direct communication between the brain and external devices. BCIs have applications ranging from assisting individuals with paralysis to controlling prosthetic limbs to enhancing human-computer interactions.

Non-invasive NeuroStimulation techniques are another area of rapid development. Transcranial magnetic stimulation (TMS) and transcranial direct current stimulation (tDCS) are being explored to treat neurological conditions such as depression and migraines.

Additionally, NeuroImaging technologies, such as functional magnetic resonance imaging (fMRI) and electroencephalography (EEG), are playing a crucial role in understanding brain function, allowing researchers to decode brain activity and create personalized interventions.

Rapid progress leads to unprecedented investments in brain research and NeuroTechnology development are being made by funds, foundations, companies, and governments worldwide. According to Deep Knowledge Ventures, investments in NeuroTech companies have gone up over 600% from $1.1 billion in 2014 to $7.1 billion in 2021.

Large-scale and interdisciplinary research initiatives have led to advanced new technologies with the ultimate goal of translating these breakthroughs into tangible products that improve our lives.

Subcategory of NeuroTech and their applications

• Brain-Computer Interfaces (BCI) - a direct communication pathway between the brain's electrical activity and an external device, most commonly a computer or robotic limb. They allow paralyzed individuals to write and control motorized wheelchairs, or prosthetic limbs with their thoughts. Current devices require conscious thought, but future applications may become effortless. Traditional BCIs involve implanted devices controlled as a natural part of the brain's representation of the body and a major challenge is developing minimally invasive electrode devices or surgical methods. The role of AI/ML algorithms is where they convert brain activity data into a programmable understanding of the brain's intentions. However, looking ahead, the ultimate goal of this technology is to create a tertiary cortex, an additional level of human brain function resembling an executive function, granting us almost superhuman capabilities.

• NeuroFeedback - real-time displays that measure brain waves to produce a signal used as feedback to teach the self-regulation of brain function. NeuroFeedback therapy aims to help patients consciously control their brainwaves by measuring specific brainwave patterns associated with different issues. For instance, alpha waves are targeted to address stress and anxiety, while beta waves are focused on improving attention and focus related to ADHD. It’s also been used to treat epilepsy, anxiety, depression, and insomnia, among other mental health disorders. NeuroFeedback is not just for therapy; it is also used for healthy individuals to enhance cognitive regulation skills based on their specific goals. Despite being a non-invasive procedure, however, its credibility has been doubted due to a lack of conclusive scientific evidence.

• NeuroModulation - is the alteration of nerve activity through targeted delivery of a stimulus, such as electrical stimulation or chemical agents, to specific neurological sites in the body. NeuroModulation devices and treatments have the power to bring life-changing effects. While chronic pain relief is a common application, NeuroModulation extends to diverse areas, such as treating Parkinson's disease with deep brain stimulation, pelvic disorders with sacral nerve stimulation, and ischemic disorders using spinal cord stimulation. Moreover, these devices can even restore lost functions, like hearing and vision in a deaf and blind patient accordingly.

• NeuroMonitoring/Imaging - are the methods for the scanning of the brain and spinal cord's physiological functioning, including the assessment of its anatomical/physiological integrity. NeuroMonitoring involves recording and analyzing electrical or physiological signals from the brain, while NeuroImaging encompasses various imaging modalities, such as magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), and functional magnetic resonance imaging (fMRI), to visualize brain structures and activities. These tools are essential in research, diagnosis, and treatment planning for neurological conditions and cognitive disorders.

• Cognitive Assessment & Enhancing - supplements, drugs, and actions that can increase the brain’s performance on key intellectual measurements. Studies have demonstrated that cognitive function can be improved through meditation, video games, novel drugs, nutritional supplements, brain stimulation, exercise, music, and cognitive training enabling better problem-solving abilities, potential IQ increase, and enhanced understanding of fresh viewpoints.

• Neural Prostheses & Simulators - are a series of devices that can substitute a motor, sensory or cognitive modality that might have been damaged as a result of an injury or a disease. Examples include devices to improve hearing, vision, motor, and cognitive functions. Neural simulators, also known as computational models or brain simulators, are software or hardware systems designed to mimic the behavior of the human brain or specific neural circuits. These simulators employ complex algorithms and mathematical models to simulate the interactions between neurons and synapses in the brain.

While in this report we cover the main subcategories mentioned above, there are many others to explore, including NeuroPharmacology, Gene Therapy, Cyberkinetics, NeuroInformatics & more.

Neurotech main Innovators

Innovation landscape of venture-funded companies in NeuroTech space.

We have compiled a list of 100+ startups that make significant contributions to the NeuroTech space and raised venture funds to spur future growth. To do that, we've leveraged public sources such as Crunchbase, Tracxn, Pitchbook, and website data.

Let's take a closer look at how various startups advance their mission in NeuroTech.

In Brain-Computer Interfaces (BCI), Elon Musk’s Neuralink device is developing a coin-sized surgical implant, fully implantable & cosmetically invisible, that closely monitors brain activity. The Link uses micron-scale wires of electrodes with the primary goal to treat paralysis. "I think it's going to blow your minds," Musk said. "It's like a Fitbit in your skull with tiny wires.”

In addition, the company is developing a surgical robot to insert the fine threads of their implant exactly where they need to be. Neuralink has been recently approved for human testing.

Backed by Bill Gates and Jeff Bezos, Synchron aims to avoid the need for open brain surgery by using a minimally-invasive procedure. Their device, the stentrode™, 8mm in diameter and made from a flexible alloy called nitinol, is inserted into Superior Sagittal Sinus in the brain via the jugular vein. Then it transmits neurological signals to a receiver unit implanted into the patient’s chest, which then translates thoughts into clicks and keystrokes on a computer or mobile device in real-time. Their end-user software brain.io™ is a hands-free, thought-controlled platform that uses translated brain signals to restore motor capabilities, allowing patients to restore motor capabilities including control of digital devices. Synchron became the first company to receive an FDA IDE to conduct trials of a permanently implantable BCI.

InnerCosmos is developing Digital Pill, a penny-sized device slipped under the skin, to alleviate cognitive disorders. It rebalances brain networks using imperceptible micro-stimulations and eliminates the need for multiple, day-long trips to the clinic required by NeuroStatic approaches like TMS, ECT, and ketamine. It delivers precise electrical stimulation to the brain, targeting imbalanced networks associated with depression. Unlike traditional invasive cranial surgery, the Digital Pill provides safe and non-invasive stimulation through the cranium.

Blackrock Neurotech designs a neurotechnology platform to record bio-potentials from the central and peripheral nervous systems in chronic and acute applications. They are engineering the next generation of neural implants, including implantable BCI technology that restores function and independence to individuals with neurological disorders.

Using their brain tech, BCI Pioneers have been able to eat, drink, send emails, and operate robotic arms just by thinking. Their technology allegedly can enable accurate brain typing at up to 90 characters per minute with an impressive 94% accuracy. Others use their BCI to play video games, Photoshop, and even paint using brain-controlled robotic arms.

Born out of the University of Michigan’s Direct-Brain Interface Laboratory (UM-DBI), Neurable has announced a $6 million Series A round of funding to develop the everyday non-invasive brain-computer interface that will take a headphones form factor and target consumers. These headphones aim to keep you focused by canceling noise.

In NeuroFeedback, EMOTIV, Muse, NeuroSky MindWave, and Melomind have been competing in portable personal EEG devices that decode cognition and behaviors in real-time to improve mental well-being, learn faster, and make better choices. EMOTIV boasts the most sensors and more accurate data, while NeuroSky MindWave Mobile and Muse tend to make meditation more comfortable.

Sleep tracking companies Dreem and NeuroVigil offer products designed to enhance sleep by analyzing a person's sleep stages in real-time and processing the data with ML algorithms to provide personalized metrics and results applicable for clinical trials, communication, and space applications.

Another company, Neurotype created a mobile brain-sensing electroencephalogram device that detects drug cravings in patients undergoing treatment for opioid use disorder, enabling clinicians and patients to get improved mental and behavioral healthcare.

Being the only FDA-cleared non-invasive medical device, BrainScope objectively assesses head-injured patients for both brain bleeds & concussions at the point of care, starting with mild traumatic brain injury (mTBI), utilizing multiple integrated assessment capabilities, AI, and digitization. Developed in part with funding from the Department of Defense with over 12 years of evidence-based research and development, eight separate DoD research contracts, and two GE NFL Head Health Challenge awards, their device has significant application potential in military and veteran medicine.

In NeuroModulation, Aleva Neurotherapeutics pioneered Directional Deep Brain Stimulation (DBS) in NeuroModulation treatment of Parkinson's disease & essential tremor.

Axoft developed implantable electronics designed to amplify brain-machine communication. The company's technology specializes in brain implants made out of ultra-flexible plastic mesh, softer than plastic and silicone implants, which are scalable and capable of integrating many sensors into one implant with the same mechanical properties as the brain, for the treatment of neurodegenerative conditions like Parkinson's disease.

Soon to complete pivotal clinical studies, Cadence Neuroscience is developing a fundamentally new approach to NeuroModulation. Their system can detect specific signals from the brain and deliver chronic subthreshold cortical stimulation to modify the activity of neural circuits. Based on pioneering research performed at Mayo Clinic, their technology can be used for treating pediatric and adult patients with focal drug-resistant epilepsy by reducing or eliminating seizures.

Saluda Medical is the first to directly measure the spinal cord's physiologic response to stimulation using Evoked Compound Action Potentials (ECAPs) to pioneer smart NeuroModulation therapy for the treatment of chronic pain. The Evoke System automatically reads, records, and responds to the nerves’ response to stimulation 4+ million times a day to provide continually optimized therapy and is proven to be superior to open-loop SCS for the treatment of overall trunk and/or limb pain.

Neurotrack's rapid digital cognitive screening offers a quick 3-minute assessment to identify patients with cognitive impairment. Designed to seamlessly integrate into primary care annual wellness visits, the tool provides instant, culturally agnostic, and objective scoring without the need for specialized training.

Neurotrack has conducted over 170,000 cognitive assessments on its platform. In recognition of its impact, Neurotrack was named the winner of the Alzheimer's Association Pitch Competition in February 2023, focusing on innovations to enhance cognitive assessment and early detection of dementia in primary care settings.

In NeuroMonitoring/Imaging, Ceribell is focused on making EEG widely accessible and more efficient for patients at risk for seizures. Individuals with no prior background in EEG can detect and rule out suspected seizures with remarkable accuracy. The System can be set up by any healthcare provider within minutes and offers 24/7 continuous bedside EEG monitoring and alert.

Kernel has recently unveiled the Flow2 system, a headset that offers researchers and clinicians remarkable access to powerful neuroimaging, resembling functional magnetic resonance imaging (fMRI), but in a more rapid and user-friendly manner. Flow2 combines time-domain functional near-infrared spectroscopy (TD-fNIRS) technology with electroencephalography (EEG), providing an exceptionally comprehensive perspective on brain activity. This enables researchers and clinicians to explore the intricate operations of the brain in greater detail.

In Cognitive Assessment and Enhancement, Brain.fm specializes in creating music and soundscapes for improving focus, relaxation, and sleep. The company utilizes AI and ML to develop personalized soundscapes for each user.

MindMaze develops digital neurotherapeutics devices to accelerate the brain's ability to recover, learn, and adapt. The company utilizes immersive virtual reality, motion capture, and neurophysiological recording technologies to build novel interfaces for neurorehabilitation, game training, and three-dimensional imaging in real-time, enabling patients to restore motor function after stroke or brain trauma. It has recently launched Izar, a smart peripheral for hand dexterity assessment and training to address neurological conditions like Alzheimer's, TBI, Parkinson's, and stroke, offering in-clinic or at-home training and assessment. Izar is hyper-sensitive, catering to the most impaired patients, and includes engaging gaming content for self-training.

In NeuralProsthesis & Simulators, MELTIN utilizes biomimetic robotic technology to replicate human body movements, enabling delicate, dexterous, and powerful finger motions. This "robotic neurorehabilitation device" facilitates the essential "pinching" action used in occupational therapy by accurately mimicking fine movements. Worn on the body, the device employs a wire-driven mechanism to provide strong assistance, allowing individuals with spasticity to open their hands with their strength.

The Ukrainian-rooted company, Esper Bionics, has developed a groundbreaking mind-controlled prosthetic arm that allows users to control the device using their thoughts. The cutting-edge technology utilizes a non-invasive BCI, enabling the user to move the prosthetic arm with precision and naturalness. The device offers hope for amputees and individuals with limb impairments, as it aims to provide them with enhanced mobility and independence through intuitive mind control.

Other examples of interesting NeuroTech applications include companies like BIOS which has developed neural interfaces and AI that, for the first time, can read and write the body's neural data, or “code”, to understand and correct those signals in real-time. BIOS envisions a new field of digital health treatments that uses this new data-driven insight from the nervous system to create better, more targeted medicine.

In Ophthalmology, Neurolens designed prescription lenses that add a contoured prism to align the eyes. Neurolenses are proven to have a profound impact on a patient’s visual clarity and comfort. Over 81% of patients suffering from chronic daily headaches reported their symptoms were substantially reduced or “basically gone” after wearing Neurolenses for 90 days.

Innervace is developing technology that acts as pre-formed, anatomically-inspired, implantable tissue pathways to directly replace lost connections due to brain degeneration or injury.

In the table below, we have assembled a list of startups that recently raised capital and are players “to watch” poised for success.

M&A in NeuroTech

With rapid advances in NeuroTechnology, there is plenty of M&A activity. One particular trend is the pursuit of Big Tech companies eager to get into the space.

Thus, in 2019, Meta acquired CTRL-Labs, a startup known for its wristband detecting neuromotor signals, enabling users to control a computer through forearm, hand, and finger movements.

Snap made an undisclosed investment in NextMind, a company offering a headset utilizing EEG technology, allowing users to interact with virtual elements using their focus.

Additionally, Valve, a major video game publisher, joined forces with OpenBCI to explore incorporating brain-computer interfaces into virtual reality headsets for immersive gaming experiences.

The industry’s incumbents have also been active in acquisitions. Thus, Flow Neuroscience has acquired the assets of brain stimulation technology developer Halo Neuroscience to advance its research into depression and other mental health disorder treatments. And Beacon Biosignals acquired Dreem, maker of clinically-validated sleep monitoring devices, setting the stage for clinical trial assessments at scale.

Find more recent deals in the table below:

Existing limitations and the future of NeuroTech

From the technical perspective, carbon nanotubes and the use of innovative polymeric biomaterials hold the promise of introducing new capabilities to neuromodulation products and show potential in enhancing existing neural interfaces, which are currently metal-based.

Neural/silicon hybrid chips can significantly increase the speed and quality of information exchange between humans and computers. In the future, they could lead to substantially enhanced neural prostheses and brain-computer interfaces.

Business-wise, the adoption of NeuroTech comes with various challenges. Safety concerns revolve around invasive procedures, and ethical dilemmas arise concerning privacy and data misuse - will we always know when the data is collected and how it is used? Will brain-wave data soon be subject to stringent privacy laws and regulations?

Cost and accessibility limit widespread adoption, and ensuring the reliability and accuracy of brain signals remains a technical challenge - who will pay for in many cases experimental devices and procedures? Will insurance organizations reimburse patients?

Additionally, the brain's adaptability may impact long-term effectiveness, and individual variability in responses needs consideration. Also, can the new tech change us/our personality as a side effect?

Finally, NeuroTechnology is relatively new, and as a result, it hasn't fully penetrated the awareness of all physicians and patients.

Despite these limitations, ongoing research and technological advancements continue to address these challenges, paving the way for the responsible and transformative use of NeuroTechnology in various fields, from healthcare to human-machine interaction.

As the NeuroTech report concludes, one undeniable truth emerges: humans are becoming more than they ever thought possible. The boundaries between flesh and steel blur, and the quest for greatness knows no bounds. The NeuroTechnology ensures that the future belongs to the superhumans - a united and augmented species, destined to transcend the stars and reshape the cosmos.

And so, with hearts brimming with excitement and hope, humanity is yet to embrace its cyborg destiny, marching forward, propelled by the power of the human mind and the boundless potential of NeuroTechnology.

Today's dreams fuel tomorrow's reality. Dream big!