"In China, one can find somebody who had passed away from heart-related diseases in every family. We want to stop it!" says Richard Zhang, CMO of Shukun Technology.
On May 24, EqualOcean conducted an exclusive interview with Anne Ma, the founder and CEO of Shukun Technology, and got a glimpse into the company's business prospects and vision. During the interview, Shukun Technology revealed intriguing insights into the company's business prospects and China's MI-diagnostics industry.
Founded in 2017, the company develops diagnostic systems that use machine learning and AI technologies for hospitals to improve efficiency in cardiovascular disease diagnosis. Shukun Technology had completed CNY 200 million Series B financing in February 2019.
Key takeaways from the interview
According to Anne Ma, China's diagnostic medical imaging market is advanced than of in the US and Japan by a considerable margin, mainly driven by the medical data accessibility.
There are three layers of licensing for the AI-driven medical devices in China. Shukun Technology has already obtained the first two levels; the final level is still at the application process. In fact, no other med-tech company could obtain it so far.
Shukun technology has not yet started to generate revenue due to regulatory obstacles. However, the company claims the biggest market share in China by the number of products installed.
The company aims to target overseas in the "middle-term", currently they have collaborations in Korea and Japan, they're seeking chances to land their product in India as well. However, their primary target is to embrace the Chinese market successfully.
The Company has a cooperation partnership with its USA correspondent, Alliance Radiology.
Shukun Technology operates from three offices in Beijing and Shanghai with over 120 employees. Around 70% of its employees are researchers.
At the end of this month; Shukun Technology will debut new products. Presumably, they extend their service scope from cardiovascular to other types of common diseases, such as the lung and breast.
EqualOcean: How would you position the Chinese diagnostic imaging industry compared with the USA and Japan?
Anne Ma: China's AI and machine learning-driven medical image diagnostic industry is much more advanced than that of the USA and Japan. There is no little doubt that Chinese companies will be the ones that will dominate the industry in the near future.
The first reason for this is the enormous medical data collection capacity of Chinese companies. Shukun Technology is doing this by entirely compliant with the international medical data collection standards, also is known as HIPAA. First, we collect the raw data from the public or private database, then remove the sensitive data from the medical data; which gives us a non-sensitive useful data.
The second reason is that China currently possesses the best AI experts globally, whom we work together with some of them. In this respect, we had several cooperations with academia and the public hospitals, letting them apply their technical capacity to our products. By establishing such fruitful collaborations, we are also finding the opportunity to raise scientific funds from the government.
The third reason is, naturally, the market. China has the most robust demand for cardiovascular diseases and other forms of cancers; which provides us with a feasible ecology to apply and improve our technology.
EqualOcean: How will Shukun Technology compete with the other players in China?
Richard Zhang: The cardiovascular disease diagnosis market is much bigger than lung and other types. What's more, cardiovascular disease diagnosis requires a much more sophisticated technological process, together with a complex data collection process. While several samples of medical data can be collected from open sources, cardiovascular medical data cannot; which retards the machine learning process. Thus, the solutions provided by Shukun Technology have a high barrier for entry and they are what the market needs.
Anne Ma: It is easy for us to launch their service if needed. But it is tough for them to provide our service since the technology we create has the highest sophistication level in the industry.
EqualOcean: Shukun Technology's founding members are from global high-tech companies. As a Start-up, isn't it hard and costly to manage and such a team?
Anne Ma: Our C-suite members are from IBM, GE, Alibaba and etc. We are all engineers and technical veterans; so we speak the same language (Laughing) Thus, is not hard for me to manage them. As for the salaries, we do not provide high wages and we all have to compromise for that. As a founder, I had no pay at the beginning. (Laughing) But we have options and equities for these founding team members, which we believe what will yield significant amounts in future.
Richard Zhang: One analyst from Fortune magazine stated that Shukun's management team would probably be the next Jack Ma. Because we're different, most of our competitors could not provide a useful product for cardiovascular diseases. We did. Then we got three rounds of financing in the last two years. In 2019, we pulled the medical AI investment; none of our competitors could. We cooperated with numerous hospitals in China, and we're getting excellent feedback from the doctors who use our products. We're highly motivated and market-driven.
EqualOcean: How many products has Shukun Technology sold so far? Please give us some more details about the company's revenue generation.
Anne Ma: Healthcare is a strictly regulated market. If we want to sell our products, we need to go through a lengthy bureaucratic process. Therefore we need to get the license from China Food and Drug Administration (CFDA). The process is very similar to that of the US Food and Drug Administration. A company who wants to sell AI-driven medical products shall successfully obtain and pass three levels of licensing; we successfully passed two degrees, however, we need to pass one more level to commercialize and sell our product. To be noted, no other company has passed the third level yet. Therefore, no other company has started to generate income from the AI-driven medical products. It is a long process, and we're in standard progress.
However, we are planning to obtain the licence and monetize our product within 2020. As of the first two years of our establishment, our target is not generating revenue but to improve our product.
Richard Zhang: What's more, we are one of the most assertive companies' in cardiovascular Medical AI field. We have confidence that we will successfully occupy the Chinese market; after that, we want to be significant in the overseas markets as well. China is not the only country where we have doctor scarcity and market need for our solutions. We had already built several cooperations with the hospitals in Japan and Korea.
Anne Ma: Next month we will be visiting India to assess the possibility of landing some of our products there. Overseas expansion is part of our vision, but as I said before, we need to occupy and utilize the Chinese market first. If you want to try one of our products, I suggest you go to FuWai (阜外) Hospital and ask the doctor about us. (Smiling)
EqualOcean: How about the operational capacity of Shukun Technology?
Richard Zhang: Shukun Technology operates from three offices in Beijing and Shanghai with over 120 employees. Around %70 of its employees are researchers. This is also why we do not waste too much money with the operational team as you thought before.
We're a product-focused company, and most of our employees are researchers.
According to WHO, about 230 million people have cardiovascular disease in China and this number accounts for 20.9% / 17.9% (urban/rural) of China's total number of deaths per year. It is obviously a gigantic market.
However, investors need to be particularly prudent when approaching AI-driven medical companies due to regulatory obstacles and technical details of the products. China's medical AI companies need to be transparent to a greater extent on their products efficiency and precision.
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