Softbank leads $89m round for Chinese online drug retailer
China-based Dingdang Kuaiyao, an online-to-offline (O2O) medicine retailer, has raised RMB600 million ($89 million) in a new round of funding led by existing investor Softbank China Venture Capital.
Other participants include CMB International Capital, Zhongjin Zhide (a PE arm of China International Capital Corporation), and Guoyao Zhongjin, a private equity investor jointly set up by China Capital Investment Group and Hong Kong-listed Sinopharm Group.
Dingdang gets medicines from drug factories directly, reducing the layers in the supply chain between patients and the drug retailer. It sells drugs mainly through its app: customers can take delivery of the medicines within 28 minutes if they live in downtown areas, or collect the goods at one of Dingdang’s locations in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Zhengzhou and Hangzhou. Patients can also schedule online consultations through the app with doctors who are on duty 24 hours a day.
The company offers medicines from 466 pharmaceutical brands including GSK, Bayer and Kobayashi Pharmaceutical, and claims to have made 50 million medicine deliveries since its inception in 2015. The fresh funding will be used to expand the company’s coverage into more cities while enhancing its customized services for consumers using the help of artificial intelligence and big data.
Dingdang raised an angel round of funding led by Chunfeng Venture Capital in 2015, and a Series A of RMB300 million from Tongdao Capital in 2016. Softbank China invested an undisclosed amount in the company for its Series B round last year.
According to healthcare information company IQVIA, China was the world's second-largest national pharmaceutical market in 2017 — worth $122.6 billion. It was also the biggest emerging market for pharmaceuticals with growth tipped to reach $145 billion to $175 billion by 2022.
Alibaba and JD.com also have their own O2O medicine retail businesses. The Alibaba Health platform promises delivery within 30 minutes, while JD.com sells medication along with other consumer goods on its platform but takes more than half a day for delivery.
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