Fourier Intelligence, a Chinese intelligent rehabilitation startup known for its robotic exoskeletons, has completed a Series C+ round of financing with “tens of millions of yuan” as it gears up for global expansion in preparation for a potential US listing in the next couple of years.
The Series C+ round was led by Shanghai Artificial Intelligence Industry Investment Fund (AI Fund), an AI-focused investment platform jointly created by Chinese state-owned companies Shanghai Guosheng Group and Lingang Group.
In a statement, Fourier said that the proceeds will be used for product R&D and improvement of its core product matrix that specialises in rehabilitation robots. It also plans to promote the establishment of a rehabilitation ecosystem by integrating the upstream and downstream players of the industrial chain.
The completion of the Series C+ round comes as Fourier, which started its journey in eastern China’s Shanghai City six years ago, has been actively repositioning itself as a global company.
For its early development in the first three to five years, Fourier was more of an “inward looking” startup trying to secure a seat in home market in China and Asia, said Zen Koh, co-founder and CEO of Fourier’s Global Hub, in an interview with DealStreetAsia. “But as we grow, our vision is always to become a ‘global facing’ company.”
Fourier, named after French mathematician and physicist Joseph Fourier, has come a long way since its inception in 2015 with a team of only 35 people. The startup develops exoskeleton and rehabilitation robotics products to help people with physical disabilities caused by neurological impairment to regain movements.
For the domestic market, Fourier targets to serve the needs of China’s rapidly aging population, while riding on the tailwinds of Beijing’s reforms, in which the government has been trying hard to balance supply and demand in its fragmented health care system for decades.
“Rehab itself is naturally suited to be decentralised. After the acute or subacute phase, patients can go back to their local community health centres in second or lower-tier cities to continue the rehabilitation process,” said Koh. This could help ease pressure in China’s top-tier public hospitals that are running at capacity, while helping boost demand in lower-tier hospitals, community health centres, and clinics.
As China remains one of its major markets, Fourier will move on to expand its footprint in the “more profitable” global market. According to MarketsandMarkets, the global market of rehabilitation equipment is estimated to grow to $16.6 billion by 2025 from $12.9 billion in 2020, representing a compound annual growth rate (CAGR) of 5.2%.
Since it officially marched into the overseas market nearly three years ago, Fourier has developed into a team of over 350 staff across offices in China’s Guangzhou and Zhuhai, as well as Singapore, and Malaysia.
By far, its rehabilitation robot products have been installed in more than 30 countries and 1,000-plus institutions worldwide, including hospitals, rehabilitation centres, elderly care institutions, and more.
Early discussions for IPO
As the firm aims to further grow its global market share, Fourier is also in preliminary discussions for an initial public offering (IPO) that could happen on Nasdaq, Shanghai’s tech-focused STAR Market, or Hong Kong.
The firm’s latest discussions at the Board pointed to a more potential listing on Nasdaq, Koh disclosed. The team might kick-start the IPO preparation work by the end of this year or in 2022.
“If we can maintain what we have generated last year and further reach another two times of growth [in revenue in 2021], we could probably initiate the formation of a VIE structure for the Nasdaq IPO,” said Koh, adding that Fourier is set to become profitable this year.
“That’s the plan. By the end of this year, we hope to at least make a decision on the restructuring. And maybe next year, we can do the roadshow,” said Koh. But he stressed that the conversation is still at an early stage and is subject to change, depending on Fourier’s growth performance in 2021.
Prior to the Series C+ round, Fourier closed 100 million yuan in a Series C round led by Chinese venture capital (VC) firm Vision Plus Capital in October 2020. Across two tranches of transactions in its Series B round, it raised a combined 100 million yuan between 2019 and mid-2020.
With a decent revenue flow, Koh said that the Series C+ round is another small-ticket transaction that helped Fourier rope in strategic investors and fund its ambitions in building an ecosystem by acquiring smaller players in the rehabilitation market.
Its early investors include Chinese venture capital (VC) firm Vision Plus Capital, whose partners have close connections with Alibaba Health, an Internet healthcare arm of Alibaba Group.
Beijing-based investment firm IDG Capital; Qianhai FOF, a fund of funds (FOF) that manages 21.5 billion yuan; and China’s Volcanics Venture, which mainly backs early-stage deals in the intellectual technology and healthcare sectors, are also among investors of Fourier.
The firm already acquired a handful of smaller rehab-related businesses in China, such as Zhuhai RHK Healthcare, which strengthened its position in the country’s lower-tier cities.
With its focus shifting more towards the overseas market, Koh said that Fourier is in negotiations to acquire players in foreign markets, including businesses in Switzerland, Germany, Spain, the United States, and South Korea.