Health VR Startup MindMaze Claims Unicorn Status with $100M Raise

Xconomy San Francisco — 

MindMaze has a long-term plan to transform medical care using imaging techniques such as virtual reality and augmented reality, and now it has $100 million from investors to explore those possibilities. The startup, based in Lausanne, Switzerland, is making San Francisco its U.S. headquarters, drawn here by the Bay Area’s active virtual reality community and its top research universities. And after its first funding round, announced today, MindMaze has its eye on acquisitions, company founder and CEO Tej Tadi says.

Tadi first trained as an engineer in computer graphics and machine learning, then studied for a PhD in neuroscience at the Swiss Federal Institute of Technology, where he started combining those two fields. He explored the potential of virtual reality and other visual stimulation technologies to help researchers better understand—and influence—the functioning of normal and impaired brains. In 2012 he founded MindMaze, which has started selling hospitals its first treatment tool (pictured above), a virtual reality system designed to convince stroke victims that their rehabilitation exercises will pay off.

A patient with a paralyzed left hand sits before a computer screen, moving her unimpaired right hand. But the MindMaze software can show the motion being executed by her left hand instead. This tricks the patient’s brain into believing that, with some effort, she can recover part of her lost function, MindMaze founder and CEO Tej Tadi says.

“The brain says, ‘I can control this hand, I should try harder,’ “ Tadi says. After the VR training session, brain scans have shown the one-sided activity of the injured brain shifting to a more equal balance of activity between the left and right hemispheres, he says. The extent of any actual gain in hand movement would vary according to the severity of the original impairment.

The MindMaze system, called MindMotion Pro, is certified for clinical use in Europe and Asia. When MindMaze was scouting for patients in India, it formed a connection with the Hinduja Group, a global conglomerate with diversified interests that span healthcare, banking, energy, and international trade. The Hinduja Group led MindMaze’s $100 million round, with participation by other investors. That brings the 55-employee company’s valuation to more than $1 billion, according to its announcement.

MindMaze’s claim to unicorn status might look like a red flag to investors these days who have seen the value of other companies—formerly pegged at $1 billion or more—deflate when their share prices sunk or a buyer acquired them for far less.

Tadi says MindMaze has earned its valuation. “We have commercialized our technology and gone through rigorous certifications,” he says. “That’s the technology that helps us substantiate the story.”

So far, MindMaze has sold or received pre-orders from hospitals for nine of its virtual reality systems, and hopes to bring that number up to 20 this year, Tadi says. At this point, the device and software combination costs $80,000 to buy outright, but the company is crafting other options, such as leasing, financing, and subscription models, to make the technology easier for hospitals to acquire. Early this year, the company plans to release a portable version of the system that patients could take home, Tadi says.

The hope is that patients can take advantage of the window of time soon after an acute brain injury to re-train their nerve cells and muscles and revive lost physical functions to some extent. In addition to MindMaze’s training software, the system could be used as a foundation for other developers’ programs, Tadi says.

“We want to create a marketplace where others could create content,” Tadi says.

Another potential use of the MindMotion Pro is to help people who have had a hand amputated, but who continue to feel pain as though the hand were still there, and tightly clenched. Part of that phenomenon is psychosomatic, Tadi says. With MindMaze sensors attached, the patient’s brain can give a command for the missing hand—visualized on the computer screen—to open into a relaxed position. Seeing that unclenched hand may lessen the phantom pain, Tadi says.

The MindMaze system is now designed only to rehabilitate disabled hands, but the company is adapting the device to help patients regain a more normal walking gait after a brain injury, Tadi says. The company also wants to try alleviating other symptoms, such as memory loss and tremor from ailments such as Parkinson’s disease. MindMaze has formed partnerships with Stanford and UC San Francisco to explore therapeutic possibilities.

The company may also provide its technology to game makers who want users to be able to see their own hands moving in the virtual world of the game.

Later this year, MindMaze plans to release a headset and game designed to bolster mental health among people who don’t have diagnosed mental illnesses. Immersive visual reality experiences may some day provide relief to people afflicted by conditions such as depression or post-traumatic stress disorder, Tadi says—but any such product should be backed by clinical studies.

“It will be interesting to see how that field maps out,” Tadi says.