Elon Musk’s famous Neuralink project, working to connect the human brain with machines, raised $205 million in a Series C round to accelerate the launch of its first brain chip product, the N1 Link. This implant, equipped with multiple sensors, will enable people with paralysis and health-related issues to connect with machines. His long-term ambition is to provide everyone with digital freedom through brain-powered remote control. Despite no product on the market and no human trials to date, they successfully secured $205 million as a symbol of an accelerating and promising NeuroTech market, yet to completely take off.
1. An evolving and promising technology
As defined by the OECD, Neurotechnology encompasses “devices and procedures used to access, monitor, investigate, assess, manipulate, and/or emulate the structure and function of the neural systems of natural persons”. Concretely, NeuroTech allows to look inside people’s brains to understand what they like, how they feel, how they react to certain things or products and to potentially enhance their condition or health (sleeping disorder, handicap…). NeuroTech is not limited to devices but also includes methods, procedures, services and even business models.
Historically, people monitored the brain through questionnaires or mood portrait by looking at people’s answers and/or what they stated to feel at the same time. Now, multiple sensors allow to go further by looking inside people’s brain or body while they answer questions or test a product. Among brain scanning technologies, the focus of this article, two types of technologies exist: historical technologies with sizeable hardware such as Functional Magnetic Resonance Imaging (fMRI) or Functional Near-Infrared Spectroscopy (fNIRS) and more recent and smaller technologies such as electro-encephalography (EEG) or implants such as Neuralink’s brain chip.
Due to less utilization constraint, non-invasive EEG appears as the most practical and most used technology among NeuroTech players. This technology is often combined with other biometric sensors (eye tracking, electrocardiogram …) to get a more accurate result. For example, eye tracking sensors can highlight what caused a stress pic measured by an EEG when looking at a video. EEG and other sensors have recently improved thanks to increased miniaturization, better wireless connectivity, and more accessible computing power, among other technological trends.
2. Increasing investment mainly driven by the US and Europe
NeuroTech fundraisings have grown by around 40% annually since 20131 and around 60% since 20191. Recent NeuroTech investments notably include MindMaze ($125 million in Series B, 2021), Synchron ($75 million in Series C, 2022), Kernel ($53 million Series C, 2020), Precision Neuroscience ($41 million in Series B, 2023) and BrainQ ($40 million in Series B, 2021). In parallel, the share of advanced funding rounds (Series B or higher) has reached around 50%1 of total funding amount, hinting at a possibly increasing NeuroTech maturity.
The US lead the pack with more frequent and higher funding rounds ($58 million on average1). Neuralink, Kernel and Nova Signals, mentioned earlier, all operate in the US. Europe, however, is close behind in terms of investment ($41 million on average1) and number of companies. Well-known MindMaze and Dreem are examples of European NeuroTech companies. Asia seems, as of today, slightly behind with smaller investment ($8 million on average1) potentially related to the younger age of Asian NeuroTech companies (3 years younger on average than their western counterparts1).
3. Increasing NeuroTech application types and future market potential
In parallel, NeuroTech applications are multiplying across three main market segments:
1. Monitoring / Knowledge: looking inside people’s brains to understand what they like, how they feel, how they react to certain products or ads
2. Treatment: improving people’s health (e.g., sleep disorder…)
3. Interaction / Control: enhancing people’s brain or body (e.g., capacity to communicate)
1. Monitoring / Knowledge
Studying the brain allows to understand its overall functioning and its state at any given moment. This segment encompasses academic research of the human brain (fundamental or applied) but also customer insights research (also called neuromarketing) which consists in understanding customer’s feeling for business applications. Concretely customer insights research can be applied upstream for product development. For example, Faurecia, a car cockpit manufacturer, leverages neurosciences with MyBrain Tech to develop a car seat increasing drivers’ comfort. Neuroscience can also be applied downstream for marketing & advertising purposes. Customer research company Nielsen indeed highlights that ads with the best emotional response (measured by neuroscience) generated a 23% lift in sales volume. This monitoring market segment seems to be the largest and only profitable segment historically thriving on academic research but more recently driven by customer insights research. Companies positioned on it include Deloitte Neuroscience Institute, Nielsen Neurofocus, Kernel, NovaSignals, Bitbrain, Emotiv, iMotions and Neurosky.
Neuroscience can also be leveraged to go further and treat brain disfunction. Treatments include both health applications with neuroscience-powered treatments validated by research (mostly B2G2C segment) and wellness & human development treatments not clinically validated (mostly B2C). The latter includes productivity, education and performance enhancement. For example, MindMaze developed a digital physiotherapy platform based on gaming to help the brain recover from a stroke. Despite strong market demand (many health issues which could be treated with neurotechnology such as sleep disorder or anxiety) and great potential in the short/medium term, this market is still limited in size due to the health sector’s constraints and a low level of customer adoption. Companies positioned on this market segment include MindMaze, Dreem and BrainQ.
3. Interaction / Control
This last segment, which includes Neuralink’s brain chip, leverages brain functions to control digital devices or to communicate, mostly for B2C applications. Various use cases were first built for disabled people to compensate body disfunction but aim to address a larger public. This market is currently a very small market due to the often-invasive B2C technology employed and to the scientific and technological challenges to solve. Still futuristic today, this segment has a great potential in the medium/long-term. Few companies are positioned on this segment and examples include Neuralink, NextMind, Ctrl-labs, Wisear and EEG Smart.
Eventually, if most newspapers reported Neuralink’s fundraising story, this kind of NeuroTech application remains quite futuristic. It should not hide, however, the significant improvements of body and brain monitoring hardware for both B2B and lately B2G2C applications (mostly in health and wellness), potentially paving the way for the democratization of neuroscience usages in the next years. And, even if the NeuroTech market remains a rather small market today, it has great potential to dramatically increase in the next years, especially when the value of NeuroTech applications outweighs all the constraints of the NeuroTech device for the end-user (size, weight, invasive aspect…). Interested in harnessing the power of NeuroTech in your industry? Discover our strategic ideation or digital expertise offers.
1. Based on a non-exhaustive review of 100+ NeuroTech companies