"Customer Base Quadrupled in One Year"... Medical AI Startup Enters Full Growth Phase

Vuno Projects 2023 Revenue of '37.5 Billion KRW'... 187.5 Times Increase Since 2019
"Diversification of Sales Channels and Expansion of AI Solutions as Basis"
AI Healthcare Market Growing at 45.1% Annually... Expected to Reach '13 Trillion KRW' in 2 Years
JLK, Lunit Also Show Strong Performance... High Growth Potential as Market Enters Development Stage

One of the solutions from the domestic medical artificial intelligence (AI) venture VUNO is 'VUNO Med-Fundus AI.' The AI analyzes fundus (the back part of the eye) images to determine major retinal diseases and lesion locations.
[Photo by VUNO]

[Asia Economy Reporter Junhyung Lee] Riding on the rosy outlook of the global market, medical artificial intelligence (AI) startups have accelerated their growth. In particular, Vuno, which recently went public, has presented a significantly increased sales forecast compared to the past. Analysts say the company's performance is gaining momentum from this year due to diversification of sales channels. Other companies in the same industry are also expected to continue expanding steadily.

According to Vuno, the company’s expected sales revenue for 2023 is 37.5 billion KRW, representing a 187.5-fold increase compared to 2019 (200 million KRW). The company anticipates that this year’s sales will increase about fivefold compared to the previous year (1.6 billion KRW). A Vuno representative stated, “We are diversifying sales channels domestically and internationally through collaborations with medical device companies, and the distribution of our launched AI solutions is expanding,” adding, “We expect that this year will be a turning point when our performance enters a full-fledged upward trend.”

AI Healthcare Growing at 45.1% Annually... “Friendly Relations with Medical Community”

The background of this outlook is the rapidly growing global market. The smart healthcare market is considered the largest among information and communication technology (ICT) convergence markets. According to Eugene Investment & Securities and others, the global AI healthcare market, which was worth 4 trillion KRW last year, is expected to grow at an average annual rate of 45.1%, reaching 13.1 trillion KRW in 2023. French market research firm Yole Development analyzed the annual growth rate of the AI market for medical imaging at 36%. The market size is projected to grow from about 500 billion KRW in 2019 to approximately 3.3 trillion KRW in 2025.

Vuno develops solutions that analyze medical data and diagnose diseases using AI. There is a misconception that AI solutions will face resistance from the medical community because they are perceived as replacing medical professionals. However, the company explains that AI solutions play a supportive role by enhancing the efficiency of medical staff’s diagnosis. They reduce the time required for image analysis, improve work efficiency, and prevent human errors, thereby reducing diagnostic discrepancies among hospitals. They also increase diagnostic accuracy for diseases with limited clinical experience among medical staff, such as rare cancers. A Vuno representative said, “We are making multifaceted efforts to maintain friendly relations with the medical community,” adding, “We have also discussed related associations and medical fees.”

In fact, Vuno’s medical clients increased more than fourfold last year to 202 institutions compared to 47 the previous year. According to industry sources, the number of clients is expected to exceed 350 this year. This is thanks to Vuno’s diligent accumulation of AI-related references until recently. Vuno was the first in Korea to obtain AI medical device approval from the Ministry of Food and Drug Safety in 2018 and currently holds approvals for a total of eight products. The company also possesses high-quality medical data secured through collaborations with major domestic hospitals such as the National Cancer Center.

JLK and Others Also Showing Strong Performance... Market Growth Potential is Limitless

Other companies in the same industry are also expected to continue expanding. JLK projects its sales revenue this year to reach 8.3 billion KRW, an 86% increase from 4.5 billion KRW last year. JLK was the first company in the industry to be listed on KOSDAQ in 2019. JLK holds 37 diagnostic solutions and has obtained Ministry of Food and Drug Safety approval for 12 AI medical devices.

Lunit and Deepnoid are aiming to go public this year. Lunit, which developed medical imaging diagnostic solutions based on deep learning technology, applied for a technology evaluation in February for a special technology listing. Deepnoid, which provides software that diagnoses lung diseases using AI, filed for preliminary review for listing with the Korea Exchange at the end of last year.

The medical AI market is now in its early stages, and its growth potential is considered limitless. Related companies in major countries, where deregulation and investment are being promoted under government leadership, have not yet seen full-scale sales. U.S. companies such as Heartflow and Arterys currently have annual sales below 20 billion KRW. Arterys collaborates with world-class IT companies like Google and Amazon Web Services (AWS), and Heartflow was valued at 1.7 trillion KRW three years ago.