Dear Friends and Digital Health Affiliates focused on China,

We are back from the summer break and excited to bring the latest digital health trends from China to you. Again, we invite you to partially shift perspectives from Silicon Valley to Shenzhen/ Beijing and engage with a USD 1.2tn healthcare market.

1) Three Key Segments of Chinese Healthtech Industry 

China’s healthcare industry is facing new challenges due to its rapidly ageing population. There is now an ostensible gap between the medical resources available and the current health needs of the nation.

1. Online patient management

49% of healthcare provider executives consider revamping the patient experience as one of their top three priorities over the next five years. The CareVoice, a Shanghai-based insurance tech startup that works with insurers to offer consumers a digital platform where information about the healthcare facilities and services covered by the insurance policy is clear and easy to process. The startup provides a triage feature service on their mobile platform that guides users to the appropriate medical facility, according to their symptoms and their insurance policy.

2. Wearables to monitor consumer health

China is plagued by 2 major health risks: 1. Ageing population: 25% will be over 60 by 2030. 2. chronic diseases, which account for 87% of deaths in China, surpassed infectious diseases. Diseases and health monitoring becomes relevant and the entire medical device market grew by 20% in 2016. Hinounou, a Shanghai-based startup, aims to develop an intelligent healthcare device for the elderly to provide companionship, tailored insurance, and ongoing health monitoring services.

3. Artificial intelligence to assist diagnosis

China has one of the lowest doctors per capita ratio: 1.8/1000. Huge quality asymmetry of in and outpatient care drives millions of people to top-tier cities like Beijing and Shanghai. With only 7.7% of medical centers, the A-tier hospitals treat more than 50% outpatients nationwide. In 2018, Alibaba’s health unit introduced AI software that could help interpret CT scans and an AI medical lab to help doctors make diagnoses. Shortly after, Tencent released its own AI software, Miying, which was first trialed in the southwestern region of Guangxi but is now used in nearly 100 hospitals across China.

Cited companies in this article:

  • CareVoice – Health InsurTech company – Total Funding: USD 3.1m (Crunchbase)
  • Hinounou – Insurtech Robot as a Service for the World’s Seniors
  • Miying Medical image reading platform of Tencent
  • Tencent – Internet service portal offering value-added internet, mobile, telecom, and online advertising services – Revenue 2018: USD 47.3bn (Statista
  • Alibaba – Enable businesses to transform the way they market, sell, operate and improve their efficiencies – Revenue 2018: USD 39.9bn (Statista

2) Investment Landscape of Chinese Healthcare sector

Recently unveiled at the China Healthcare Investment Conference (CHIC) in Shanghai, China-focused healthcare fundraising expanded rapidly last year, even as overall private fundraising in the country slowed.

Healthcare remains a bright spot with another record year across all dimensions, with funds raised targeting the China sector, both inside and outside the country, hitting USD 42.8bn, and deals closed reaching 696, a 10x increase since 2015. 

Notable 2018 highlights included:

  • Shanghai-based venture firm Quan Capital filing to raise USD 300mn for its second fund in September, doubling the size of its first launched the previous year.
  • Alibaba founder Jack Ma’s healthcare-focused PE firm Yunfeng Capital announcing in August it had completed fundraising of USD 2.5bn for its latest fund, having in April led the acquisition of Beijing-based iKang Healthcare Group.
  • CStone Pharma in May securing USD 260mn in financing, at the time the largest Series B round in the China pharmaceutical industry. 
  • Brii Biosciences’ May launch, backed by USD 260mn financing and partnerships with Vir Biotech, WuXi AppTec/Wuxi Biologics and Alibaba.
  • I-Mab Biopharma in June raising USD 220mn in Series C funding ahead of an expected IPO this year.

Investor decisions are already being influenced by the prospect of prolonged trade and geostrategic tensions between the U.S. and China. This trend will be exacerbated by the Committee on Foreign Investment in the United States (CIFUS) April 2019 decision to order Chinese genomics player iCarbonX to divest its ownership of U.S.-based healthcare data company PatientsLikeMe.

Cited companies in this article:

  • iKang Healthcare Group – Health InsurTech company – Total Funding: USD 3.1m (Crunchbase)
  • CStone Pharmaceuticals – Bio-pharmaceutical company – Total Funding USD 410mn (Crunchbase)
  • Brii BiosciencesBiotechnology company that commits to bring innovative medicines to China as a way to improve public health
  • WuXi AppTecGlobal pharmaceutical, biopharmaceutical, and medical device outsourcing company – Tofal Funding: USD 1.6bn (Crunchbase)
  • WuXi Biologics – The only open-access biologics technology platform
  • I-Mab Biopharma – Global player in innovative biologics – Total Funding: USD 379mn (Crunchbase)
  • iCarbonX – China-based artificial intelligence platform for health data company – Total Funding: USD 200mn (Crunchbase)
  • PatientsLikeMe World’s largest personalized health network – Total Funding: USD 127mn (Crunchbase)

3) Sino-European Digital Health Conference 2019

As China foreign investment in the US has declined by 90%, Europe has become inevitably vital partner and market for both Chinese firms and investments. Thus, the intensity of cooperation between Europe and China in the healthcare sector has largely increased. To better understand the current dynamics and exploit opportunities for cooperation, various experts and entrepreneurs are invited to share their insights and experience from both sides. 

We invite you to join us on this unique event. Speakers include:

Dr. Gottfried Ludewig, Head of Digitalization, Federal Ministry of Health

Yin Jun, Department of Science and Technology, Chinese Embassy

Alexander Kulitz, Member of German Parliament

Geoffrey So, Head of Strategy, Novartis Foundation

Dr. Henrik Matthies, Managing Director, hih – health innovation hub

Min-Sung Sean Kim, Venture Capitalist

Daniel Nathrath, CEO ada

Christian Rebernik, CEO vivy

PD Dr. med. Dominik Pförringer, surgeon & digital health expert

Marcus Polke, Managing Director, Signals Venture Capital

Again, We hope this short overview gives you a better understanding, what is going on in China and thank you very much for your positive feedback so far. See you again in two weeks.

Have a productive Week & 祝大家成功!

Chenchao & Min-Sung