Ekso Bionics develops exoskeleton technology for stroke and spinal cord injury rehabilitation.Ekso Bionics Holdings Inc.
China is expected to have 30 million stroke patients by 2030, and many of those patients will have some degree of disability. And yet, the stroke and spinal cord rehabilitation industry in China is not as developed as it is in the United States. A new joint venture between Ekso Bionics, Zhejiang Youchuang Venture Capital Investment (ZYVC) and Zhejiang Silicon Paradise Asset Management Group could change that.
"This joint venture is a transformative opportunity both for Ekso Bionics and for the millions of Chinese stroke and spinal cord injury patients who currently have limited access to advanced rehabilitation technologies," said Jack Peurach, president and CEO of Ekso Bionics. "This joint venture positions us to become the leader in both medical and industrial exoskeletons in China.”
The joint venture is designed to both develop and serve the exoskeleton market in China and other parts of Asia and to create a global exoskeleton manufacturing center. The JV will develop, sell, and support exoskeleton products into China, Hong Kong, Singapore, and Malaysia, and will be capitalized at greater than $100 million over its term. Richmond, CA-based Ekso Bionics will license its manufacturing technology and contribute its relevant Chinese patent rights to the joint venture in exchange for a 20% ownership position, with the other partners committing more than $90 million in cash.
As part of the agreement, subject to certain conditions, Ekso Bionics will receive royalties on the joint venture’s medical and industrial product sales in China, Hong Kong, Malaysia, and Singapore. ZYVC and its related parties will also make an equity investment of $10 million in Ekso Bionics, of which $5 million is being invested now and the remaining $5 million will be invested after the joint venture begins shipping products. A portion of the joint venture capital will be used to construct a manufacturing facility in Zhejiang.
Gaining access to the world’s largest market for stroke rehabilitation services is expected to expand Ekso's revenue opportunities while providing economics of scale that will accrue to its current markets and support profitable expansion into other developing markets. The joint venture’s manufacturing facility, which will be purpose-built to manufacture the component parts of Ekso Bionics’ products at scale, is expected to also improve the company’s profit margins. The company expects that these benefits will help it attain its long-term growth objectives while furthering its mission to protect and enhance mobility for millions of rehabilitation patients and industrial workers worldwide.