Break down the opportunities behind the health care investment boom

In the past two years, both the old-fashioned equity investment institutions with brilliant achievements and the new investment institutions with their own names have placed more attention on investment in the medical and health fields.

The accumulation of investment institutions has led to high valuations in the health care sector (especially medicine). Zheng Weihe, the chairman of Tongchuang Weiye, even expressed the feeling that “the valuation bubble of medical projects can even be compared with the Internet valuation bubble of the previous two years.”

According to private equity data of Zero2IPO Group, there were 393 investment cases in the Chinese market in March 2017, and 365 cases of disclosures, with a total investment amount of US$6.934 billion. Among them, the biotechnology/healthcare industry financing reached 875 million US dollars, accounting for 12.6%, becoming the industry with the largest amount of financing in the month.

Looking back at the medical and health industry investment market in 2016, Lu Mingfang, the managing director of Fangyuan Capital, summarized it as “uneven heat and cold, opportunities reappear”. He introduced at the first China Healthcare Industry Investment 50 Forum ("H50") that the number of investment institutions in China's professional investment in the healthcare industry has exceeded 262 in 2016, twice as many as five years ago.

工信部出台健康大数据产业发展规划

In addition to the continued favorable policies, the medical and health industry in the Chinese market has shown a prosperous future: According to the “Healthy China 2030” Planning Outline issued by the State Council, the total size of the health industry will exceed 8 trillion yuan in 2020 and will exceed 160,000 in 2030. 100 million yuan. China will establish a healthy industrial system with complete system and optimized structure, and form a group of large-scale enterprises with strong innovation capabilities and international competitiveness.

Investment institutions get together medical health

In 2010, under the background of Junlian Capital's “professional group” model, the managing director Ouyang Xiangyu began to set up the Junlian Capital Health Medical Team. In September 2015, Junlian Capital officially launched the medical fund, and the fundraising of the US dollar fund and RMB fund was completed in February 2016.

Recalling the original intention of setting up a medical investment group, Ouyang Xiangyu said: "The future development trend of investment should be professional and focused, in order to systematically establish industry cognition and personal relationship, and seize the opportunity more sensitively to technological development changes. It is early and growing, and more professional attention is needed to achieve better results."

Starting with the formation of a professional medical investment team, Junlian Capital's investment in the medical field has expanded from medical services to a wider range of fields including biomedicine, genetic diagnosis, and medical devices.

Founded in early 2016, Yuanyi Capital currently manages a RMB 500 million RMB fund and a US$100 million US dollar fund. Health care is one of the two key areas of focus for this new institution. Among them, the medical and health industry mainly focuses on three investment directions: medical technology, mobile medical and service, and gene sequencing applications.

“The opportunities that are generated at the policy level are enjoyed by all market participants. For VCs, good investment targets must have technical thresholds. Medical health and financial technology are industries with thresholds. It seems that there are many opportunities. Everyone can do it, but after the big waves, there are still projects with technical thresholds." Yang Ruirong, a partner of Yuanyi Capital, told the 21st Century Business Herald.

In the field of medical and health investment in China, despite the decline in Internet medical investment and the downgrade of project valuation in the past year, the early research and development of new drugs based on returnees, medical devices with core technological advantages, and new technologies related to precision medicine It is still the main hot spot of VC investment.

"Medical services and retail chain pharmacies, as the two main terminals, are increasingly valued by investors. However, in the process, everyone clearly feels that the valuation has risen too fast, and there are certain signs of bubbles." Lu Mingfang added.

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