WeDoctor’s new funding contributes to the rise of China’s Internet healthcare sector

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Last week’s highlight covered the online medical industry, as WeDoctor secured a large amount of funding.

On May 9, Hangzhou-based online healthcare service app WeDoctor landed USD 500 million in strategic funding led by insurer AIA Group and infrastructure company NWS Holdings. The influx of financing has pushed the startup’s valuation to USD 5.5 billion before its IPO later this year. This constitutes China’s largest pre-IPO financing round in the health-tech sector.

WeDoctor will use the fresh capital to accelerate its expansion to better serve China’s flourishing healthcare market, which has drawn interest from insurers across the world. AIA also signed a strategic cooperation agreement with WeDoctor to become its life and medical insurance partner. Moreover, the startup will construct its cloud service as a smart health maintenance platform.

Backed by tech giant Tencent, WeDoctor offers convenient access to public health services, enabling patients from peripheral communities to enjoy high quality medical services. Founded in 2010 by Jerry Liao Jieyuan, WeDoctor has linked over 27 million monthly active users with  over 2,700 hospitals across the country.

In 2015, WeDoctor founded the country’s first internet hospital in Wuzhen city in Zhejiang province. Liao said that the platform opens an online window for regular hospitals and helps balance unevenly distributed medical resources.

With close cooperation with provincial governments, WeDoctor aggregates local residents’ health records and hospital records, thereby forming a tremendous database. Jerry Liao said in 2016 that the information would be shared among all cooperating hospitals and that all patients should bring their smartphones when seeing a doctor .

In 2013, China surpassed Japan as the world’s second-largest healthcare market. Nevertheless, though China’s healthcare expenditures reached USD 697.7 billion in 2016, its healthcare spending per capita is only 6% of GDP. Boosted by the Plan of Health China 2030, released by the State Council in October 2016, China’s healthcare market is expected to reach USD 2 trillion in 12 years, bringing enormous opportunities for all sorts of businesses in the healthcare industry.

Meanwhile, it ought to be noted that the healthcare reform commenced in 2009 is still ongoing. Massive challenges exist, such as a shortage of hospitals in rural areas, which create demand for online medical consultation services.

Sensing such huge potential for growth, Tencent supported another online healthcare service platform, DXY, with over USD 100 million in Series D funding this April. Back in January 2016, Alibaba also built online medical and health provider Alihealth, which in May 2017 reported a soaring 739 percent year-on-year revenue increase.

This pre-IPO funding follows the IPO of competitor Ping An Good Doctor, which raised USD 1.1 billion through a Hong Kong listing in April and then suffered plunging share prices after its high valuation drew concerns.

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