Building & Scaling MedTech Startups: Lessons from Leon Zheng

Welcome to MedTech Maestros, where we explore the exceptional journey and insights of Leon Zheng, a medtech visionary whose work has redefined radiosurgery and scaled startups globally. Leon’s experience from founding startups to advancing AI in healthcare offers invaluable lessons on building, scaling, and exiting a medtech business.

An Accidental Path to MedTech

Leon’s introduction to medtech was a chance occurrence that led to a transformative career. Initially trained in industrial engineering management, he explored various fields before landing in medtech, which was booming in Shenzhen, China. Joining OUR Medical, a leading radiosurgery device manufacturer, he learned the complexities of the industry firsthand.

“Thirty years ago, China’s medtech landscape was vastly different, and building high-complexity devices was an uphill challenge,” Leon recalls.

The company collaborated internationally for precision components, an experience that exposed him to global standards and partnerships early on.

During this time, Leon saw the profound impact of medtech innovation:

“Helping a young girl with a brain tumor walk again through my invention was life-changing.”

This pivotal experience inspired him to pursue his own entrepreneurial journey.

Leon’s First Startup: From $50K to a $25 Million Exit

In 1999, Leon co-founded his first startup with just $50,000 from the founder and a vision. With minimal resources, he began with a small team and scaled it to 150 employees, building a company valued at $25 million. Over the years, they bought a building in Shenzhen’s High-Tech Park, established partnerships with 35+ medical centers across China, and generated significant revenue through radiosurgery and hypothermia devices.

Leon’s strategic choices, however, meant taking risks with partners and investors, which led him to exit the company earlier than planned. Reflecting on the experience, he noted,

“I exited because we had differing visions, but it was an essential learning curve about scaling sustainably with the right partners.”

Leon’s second startup focused on the international market, a bold move that yielded significant early success. Within three months, he secured a $3.2 million contract, developed a complex radiosurgery device, and achieved FDA and CE mark approvals within a year. But the 2008 financial crisis hit hard, with major orders in the U.S. stalling.

“We were heavily invested in manufacturing and developing a new linear accelerator technology, but the crash forced us to pivot,” he recalls.

Although financially challenging, the company continued to treat over 30,000 patients worldwide, delivering significant clinical impact.

From Startup to Exit: Lessons in IP and Strategy

For Leon, building a strong intellectual property (IP) portfolio is the foundation of a successful medtech startup.

“Having eight patents myself and a solid IP portfolio gave us the leverage to lead our niche,” he explains.

Partnering with regulatory bodies like China’s CFDA positioned his companies favorably in the market. Leon’s team even co-drafted industry standards, highlighting the importance of regulatory alignment in medtech innovation. This proactive approach won his company a $2.5 million government grant for their whole-body hypothermia technology.

Exiting with ease, Leon adds, relies on positioning and partnerships.

“Being among the top three in your niche market attracts acquirers and smoothens the exit process,” he advises.

With his startups, Leon strategically aligned products and partnerships to appeal to potential buyers, ensuring they were competitive and visible in the market.

Scaling MedTech: Aligning with Acquirers and Prioritizing Compliance

Scaling a medtech startup is not just about innovation; it’s about preparing for regulatory and market demands.

“Regulation is even more critical than innovation,”

Leon states, explaining that regulatory pathways often take 30 to 40 months, longer than product development itself. For startups aiming to scale, he advises incorporating regulatory compliance from the start to save years of potential delays.

“If you consider regulatory compliance from day one, you streamline both time and resources,”

he explains, adding that this integrated approach reduces risks in later stages.

When seeking a high valuation, Leon emphasizes being a top-three player in a niche market.

“Acquirers look for growth potential. Being well-positioned within a niche gives you an edge,” he says.

By showcasing growth and aligning with acquirers’ strategic visions, Leon’s companies demonstrated their long-term value, securing better valuations and exit opportunities.

AI in MedTech: A Game-Changer with Endless Potential

Leon is an outspoken advocate for AI in medtech, stressing that

"no one in medtech should miss this trend."

He differentiates between predictive and generative AI, highlighting their distinct applications. While predictive AI supports data management and decision-making, generative AI is opening doors for medical applications in surgical robotics, treatment planning, and regulatory compliance.

AI, he notes, is revolutionizing how startups approach compliance by streamlining technical documentation and risk management. The rise of AI-integrated devices is evident, with FDA approvals doubling within a year.

"AI plus robotics is the future of medtech,"

Leon predicts, adding that AI’s role in vertical applications will unlock new possibilities as companies leverage domain-specific data to enhance patient outcomes.

Leon believes the future of medtech is rich with opportunities, particularly for those embracing innovation responsibly.

His advice?

Build a strong IP base, prioritize compliance, and stay adaptable to industry needs. Whether it’s achieving groundbreaking technology or scaling a startup for a successful exit, Leon’s journey offers invaluable lessons for medtech innovators.

Thank you for joining us for this deep dive into the world of medtech with Leon Zheng. Stay tuned for more insights from top innovators in the next edition of MedTech Maestros