A doctorate from MIT, set the largest financing record: 1.44 billion.

I just want to know why surgical robots have been so popular recently. Yesterday, Constellation Medical Technology received a $200 million (about 1.4 billion yuan) financing round led by Hong Kong Investment Corporation.

According to data from Pencil News, this is the largest financing (publicly disclosed) for a domestic surgical robot company this year.

This popularity is not an isolated case.

In November this year, Agile Medical Technology raised hundreds of millions of yuan; in September, Aotai Micro Precision raised hundreds of millions, and Deep Medical received Series A financing... Don't be skeptical. In total, there have been 31 financing events for domestic surgical robot companies since the beginning of this year.

What's going on? Will robots penetrate into hospitals and perform surgeries on ordinary people in the next few years? Today, let's take advantage of Constellation Medical Technology's financing event to explore: What exactly is happening in the surgical robot market?

- 01 -

Constellation Medical Technology was founded in 2019 by Ou Guowei, who previously pursued a Ph.D. at the Massachusetts Institute of Technology (MIT) School of Mechanical Engineering, researching projects such as mechanical ankle prosthetics.

After graduation, he joined the globally renowned surgical robot company, Intuitive Surgical, and was involved in projects related to single-port surgical robots and lung biopsy surgical robots.

Its core product is the Sentire® laparoscopic surgical robot system.

Image source/Constellation Medical Technology WeChat official account

What is it? It's a robot that uses a joystick to control mechanical arms and can be used for minimally invasive surgeries.

The doctor sits in front of a console and operates using controls such as a joystick and foot pedals. The robot's mechanical arms are equipped with surgical instruments and cameras and work through small incisions in the patient's body.

What can it be used for? Various minimally invasive surgeries (as shown in the following table).

It's also quite fast. The company was founded in September 2019, and by August of the following year, it had completed a proof-of-concept prototype.

As of November 2023, its robots had started clinical surgeries: more than 100 multi-disciplinary human clinical trials were completed in mainland China and Hong Kong.

In July this year, it completed 3 colorectal (clinical) surgeries at Portsmouth University Hospital in the UK;

In August, it announced a clinical verification in Macau: the world's first autonomous/embodied intelligent platform in robot-assisted surgery. What does this mean? It means that the robot can automatically perform some actions or make judgments under the doctor's supervision. This at least shows that it has reached the verification stage before commercialization.

Some people may ask: Can't it be commercialized yet? What conditions are lacking? At least two aspects are missing: 1. Some regulatory certifications; 2. Large-scale production.

So, the question is, why do hospitals or doctors need Constellation Medical Technology's robots?

Firstly, it's about surgical precision and vision. In traditional abdominal surgeries, doctors are like holding two long and rigid chopsticks to do delicate work in a narrow pelvic cavity, and they can only view the surgical area through a two-dimensional flat screen, which restricts hand movements.

Robots like Constellation Medical Technology's can bend and rotate like a human wrist and can move freely in a very narrow space; at the same time, with a three-dimensional 3D high-definition vision, doctors can "see" the internal structure as if they were there in person and have a sense of space.

Don't believe it? You can look at the feedback from the Portsmouth University Hospital team in the UK: "We were able to stably complete dissections and sutures in these narrow spaces, and all three surgeries were successfully completed without any need to switch to open surgeries."

Secondly, it's about price: it's not only useful but also inexpensive.

According to the South China Morning Post, the Sentire® is positioned as a "mid-priced domestic alternative," and the overall price is expected to be 40 - 60% of that of the Da Vinci system.

Here, it's worth mentioning that the Da Vinci system is currently the most widely used and mature surgical robot system globally, partially monopolizing the high-end surgical robot market.

- 02 -

Through the case of Constellation Medical Technology, we should have a preliminary understanding that surgical robots are very different from other types of robots, such as industrial robots, service robots, and humanoid robots.

What do people focus on when it comes to humanoid robots? They focus on human-like intelligence, hoping that it can walk, talk, carry water, and handle objects, with the goal of replacing human labor.

What about industrial robots? People don't have such high requirements for their intelligence but need them to be fast, accurate, stable, and tireless.

For medical robots, their evolutionary goal is to amplify the doctor's capabilities and reduce risks. For example, cutting a 1-millimeter safety margin inside the body and suturing a 3-millimeter blood vessel without touching any nerves.

To sum it up roughly: industrial robots replace humans, humanoid robots imitate humans, and medical robots amplify humans.

Different evolutionary goals make medical robots unique.

For example, in terms of form, most surgical robots don't pursue a humanoid shape but a mechanical arm structure, looking like multiple independent "arms" working around the operating table. Unlike other robots, they don't pursue universality and flexibility but extreme precision and safety.

That's why, in the application of new technologies, surgical robots aren't at the forefront. Some technologies even date back 25 years (the Da Vinci system was launched in 2000). They are restricted by extremely high safety requirements and supervision.

Of course, there has been significant progress.

Compared with products 25 years ago, the biggest improvement in today's surgical robots is that previously they were just an "extended hand" of the doctor (100% human-controlled), while now they are an "AI assistant" that can semi-autonomously complete some auxiliary tasks, such as suturing.

Comparison between traditional surgical robots and new-generation robots

- 03 -

As mentioned earlier, do investment institutions pay so much attention to surgical robots because it's the time for an explosion? Is the application stage mature? The answer is: it's in the early stage of application, and now is a good time to invest.

Take traditional surgical robots, such as the Da Vinci system. It covers more than 300 hospitals in China, with an installed base of about 380 units.

There are about 37,000 hospitals in China (including public and private ones), among which there are about 2,500 tertiary hospitals and about 10,000 secondary hospitals (data from the National Health Commission, 2024).

What does this data indicate? Even after 20 years of development, the popularity of traditional surgical robots isn't very high - in tertiary hospitals or large private hospitals, surgical robots are an optional rather than a standard equipment.

Some may ask: After 20 years of evolution, the penetration rate of surgical robots is still so low. Is there a problem with the demand?

A key reason is that they are too expensive. A set of the Da Vinci system costs $1.5 - 2.5 million, and the annual maintenance and consumables costs can reach millions of yuan. It's precisely because of the high price that domestic new players have an opportunity.

Now, look at the new-generation robots. New players represented by Constellation Medical Technology are currently approaching the commercialization stage - we can classify them as "domestic new players."

Their total installed base is low, but the growth rate is fast. Why is the penetration rate of domestic new players low? There are several reasons.

One reason is that they started late. Most new products didn't receive approval from the National Medical Products Administration (NMPA) until after 2023.

Another reason is that the market was previously monopolized by traditional giants.

So, what will happen in the future? Here's a set of data. Information shows that domestic surgical robots (including but not limited to Sentire®) are "starting from scratch" in the county/medium-sized hospital market and growing rapidly.

The penetration rate of domestic surgical robots in county-level hospitals in China is expected to increase from about 6.5% in 2023 to about 25% in 2030.

So, why are VCs willing to invest heavily at this time? Because in the past 20 years, we can not only see the development direction of surgical robots but also the development path, from tertiary hospitals to secondary/county-level hospitals, and from the domestic to the international market.

Constellation Medical Technology predicts that by 2030, there will be about 34.23 million new opportunities for minimally invasive surgeries in the domestic surgical robot market.

So, it's no exaggeration to say that the spring for domestic surgical robots has just begun.

This article does not constitute any investment advice.

This article is from the WeChat official account “Pencil News” (ID: pencilnews), author: Honest One. It is published by 36Kr with permission.