Neuralink, the brain implant startup founded by Elon Musk, has seen a significant increase in its valuation based on recent privately executed stock trades, according to sources familiar with the matter. The company, which was valued at nearly $2 billion in a private fundraising round two years ago, is now estimated to be worth approximately $5 billion. The surge in valuation came after Neuralink announced on May 25 that it had received approval from US regulators to conduct a human trial on its brain chip.


While experts have noted that it could take several years for Neuralink to obtain commercial use clearance, the recent approval of the trial prompted bullish investors to make purchases, thereby driving up the company's value. However, Neuralink faces various challenges, including ongoing federal investigations into its handling of animal research.


Despite the increased valuation, the recent stock transactions were primarily carried out by existing shareholders, such as employees and early backers, rather than Neuralink selling new shares to investors. Such secondary trades are not considered as reliable as fundraising rounds or initial public offerings (IPOs) in determining a company's value.


Elon Musk has expressed ambitious goals for Neuralink, envisioning its chip as a solution for treating a range of conditions, including obesity, autism, depression, and schizophrenia. He even envisions future applications such as Web-surfing and telepathy. However, a Neuralink executive recently outlined more immediate objectives, such as enabling paralyzed patients to communicate via computerised text without typing.


While demand for Neuralink stock has been significant, some biomedical experts remain sceptical, considering the early stage of the brain implant's clinical development. Others have raised concerns about potential conflicts of interest and animal welfare violations at Neuralink, which have prompted investigations by US authorities.


The company's challenges notwithstanding, Neuralink's recent valuation increase in secondary trades sets it apart from many other startups. Currently, approximately 85 per cent of pre-IPO companies have valuations in secondary trades that average a 47 per cent discount compared to their last funding rounds.


Neuralink's journey towards commercialisation and overcoming regulatory and investigative hurdles will shape the future of the company and its ambitious goals.


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