WeDoctor raises US$500 million in private share sale, valuing company at US$5.5 billion

WeDoctor Holdings, an online health care services provider backed by Tencent Holdings, has completed a US$500 million private share sale, in the second major equity financing deal in China’s nascent “health-tech” sector in three weeks. 

The share sale is “the largest pre-IPO financing ever in China’s technology-based medical and health care sector”, valuing the start-up at US$5.5 billion (HK$43 billion), the Hangzhou-based medical information and online consultation provider said in a statement on Wednesday.   

Medical insurance major AIA Group and tycoon Henry Cheng Kar-shun’s infrastructure conglomerate NWS Holdings are the largest buyers in this round of equity fundraising.

“Following the investment and the agreement of a strategic partnership, AIA will become WeDoctor's preferred provider of life and health insurance solutions,” WeDoctor said. “Both parties are aligned in their intent to provide innovative and high quality offerings that improve the health and well being of people in China and around the Asia-Pacific region.” 

AIA has operations in 18 markets in Asia-Pacific.

China Investment Financial Holdings Fund Management, a unit of sovereign fund manager China Investment Corporation, took part in the latest fundraising by WeDoctor. WeDoctor also counts Fosun International, Goldman Sachs and Hillhouse Capital Group among its investors.

The mainland’s internet health care services industry has been growing 38.7 per cent annually on average in the four years to 2016, reaching a collective value of 10.9 billion yuan, according to Frost & Sullivan.  

The sector may grow in the decade to 2026 at an annual rate of 33.6 per cent to reach 197.80 billion yuan, according to the market research company.  

Ping An Healthcare raised HK$8.8 billion through a Hong Kong listing in April, giving it a market value of HK$57.40 billion.

A shortage of hospitals, clinics and doctors in rural communities has fuelled demand for online medical consultation services.

They are often bundled with online sales of medicine, medical supplies and health insurance by companies like Ping An Healthcare – a unit of Ping An Insurance – and WeDoctor. 

WeDoctor, founded by Jerry Liao Jieyuan in 2010, said its online platform links up more than 2,700 hospitals, 220,000 doctors, 15,000 pharmacies and 27 million monthly active users. 

The fast-growing health-tech sector also includes companies seeking to “digitalise” the supply chain across the health care industry, such as London-based health-tech firm Medopad, in which NWS in also an investor.

Medopad plans to hire 500 staff in China in the next 18 months to collect patient data via wearable electronic devices, the company’s co-founder and chief executive Dan Vahdat said in March. 

Meanwhile, Ascletis Pharma is seeking to raise US$500 million to US$700 million by floating around 20 per cent of its shares by August, according to two sources familiar with the deal.

The proposed listing is the first by a biotechnology company under new rules that came into effect on April 30.

The company is seeking a post-IPO market capitalisation of US$2.5 billion to US$3 billion, the sources said.