Insight hits $72m second close on China healthcare fund

The venture capital firm, founded in 2015, said a first of RMB250 million came in March. The hard cap has been set at RMB600 million and a final close is expected in March. Investment activity will concentrate on medical devices and innovative healthcare services.

“After we reached our first close, the renminbi fundraising space suddenly cooled off. So this year we have been focusing on finding new institutional investors,” said Zhenming Li, a managing partner at Insight Capital.

According to AVCJ Research, approximately $27 billion was raised for local currency funds in the first six months of 2018, but between July and September, the total fell below $1 billion. The slowdown has been blamed on concerns about the meltdown in the peer-to-peer (P2P) lending space, a weakening in market sentiment driven by global trade tensions or the slowing economy, and restrictions on financial institutions participating in the asset class.

Insight previously raised two healthcare funds  - of RMB160 million and RMB250 million - with China’s THG Ventures. It spun out from THG in 2017. Including these two earlier funds, total assets under management are about RMB1 billion.

The LP base for the new vehicle includes state-backed fund-of-funds, China Development Bank, China International Capital Corporation (CICC), and Myrtus Capital. Some investors from the earlier funds, including individuals and institutions, also re-upped. Li said that around 80% of the LPs are institutional investors.

Insight has earmarked around 20% of the corpus for follow-on investments in existing portfolio companies. A total of RMB97.8 million has been deployed so far across six companies. AKM Pathology, a leading pathology diagnostic lab operator is one of the investees. Specific areas of interest for Insight include implantable medical devices and technologies that improve diagnosis.

Prior to launching the firm, Li worked for Sequoia China Capital and Qiming Venture Partners. The other two co-founders and managing partners, Lan Zhang and Lei Chen, are also industry veterans. Zhang formerly served as a managing director at Guochuang Kaiyuan FOF and a vice president at CDH Investments, while Chen worked at Qidi Ventures.

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• Topics
• Greater China
• Healthcare
• Early-stage
• Venture
• China
• Growth capital
• Sequoia Capital
• Qiming Venture Partners