SHANGHAI -- Fourier Intelligence, a startup known for its robotic exoskeletons, has acquired a rehabilitation services provider in a move aimed at tapping the needs of China's massive -- and rapidly aging -- population.
Shanghai-based Fourier, whose wearable robotics are used in hospitals and research institutes in 20 countries, announced the acquisition of Zhuhai RHK Healthcare on Monday.
"Through the combination of intelligent devices and services, we will complete an ecosystem and raise the effectiveness of rehabilitation, which could offer new clinical prescriptions," Alex Gu, founder and chief executive of Fourier, said in an interview.
In China, rehabilitation services are concentrated in top public hospitals in major cities. Fourier, which is backed by IDG Capital, already serves some of those hospitals, where it helps overstretched physiotherapists manage heavy caseloads.
Now it is looking to the larger market of hospitals in second-tier and smaller cities.
Acquiring RHK, which serves over 200 hospitals across China, would give Fourier access to a bigger customer base and more data feedback, which are crucial for the research and development of new products. The aim is to expand Fourier's own current network of about 10 hospitals and research institutions to between 500 and 1,000 in the next two to three years, according to Gu, a former sales executive at National Instruments.
"This is a game changer for the industry, and we hope to be a pioneer in this transformation by taking the first step," Gu said, adding that the value of the acquisition was in the "tens of millions yuan."
Established in 2015 and named after French mathematician Joseph Fourier, Fourier specializes in robotic products designed to help people with physical disabilities caused by neurological impairment to regain movements. These products are certified as medical devices by regulators in Australia, China, Japan, Singapore and the U.S., among others. End users also include medical researchers.
"Fourier and other suppliers alike are producing easy-to-use devices and providing data interface for us to garner clinical data pertinent for our work," said Niu Chuanxin, an associate professor in the Department of Rehabilitation Medicine at Shanghai Jiao Tong University.
Fourier's fundraising includes 100 million yuan ($14 million) raised across two Series B rounds, including one that closed last month. "Series B" indicates a startup that is in the growth stage and is scaling up its market reach.
China has a huge demand for demand for rehab services due to its growing aging population, but the country has yet to come up with comprehensive system, said Pang Changwei, chief investment officer at Shenzhen Guozhong Venture Capital, which manages 6 billion yuan worth of equity funds targeted at small and medium enterprises.
An investor in Fourier, Pang noted the startup's collaboration with local and global institutions to promote the use of robotic intelligence in rehabilitation and said it is driving standards for the industry.
"This is important to create an ecosystem," Pang said.
The number of people in China aged 60 and above is projected to grow to 433 million in 2040, or 30% of the total populations, up from 166 million, or 12%, in 2010, according to a United Nations estimate.
One hurdle for Fourier, however, is the high price tag of its products. The ExoMotus, a lower extremity exoskeleton robotic device, reportedly costs around 800,000 yuan with an open software platform.
The high cost of its products will partly be mitigated through the acquisition of RHK, which offers rehab services to community-based hospitals that are trying to meet the growing demand for tech-driven physiotherapy. RHK is also involved in medical equipment leasing and financing, providing Fourier with marketing support to tap hospitals in lower-tier cities, which normally face budget and staffing constraints.
China's rehab market is projected to grow to 103.2 billion yuan in 2021, from 58.3 billion yuan in 2018, according to China Industrial Research Institute.
"We hope to serve different level of the rehab service network across China," Gu told employees and investors at the signing ceremony with RHK on Monday.