Investcorp increases focus on China healthcare
Investcorp has acquired minority stakes in two Chinese healthcare companies – hospital operator Lu Daopei Medical Group and telemedicine platform WeDoctor – paying undisclosed sums.
The private equity firm said these investments marked the launch of a new platform dedicated to backing Chinese healthcare businesses. It aims to create a highly curated portfolio of primary and secondary stakes in sector-leading players that have remained resilient through the COVID-19 pandemic and are expected to see accelerated growth in the post-pandemic world.
Founded in 2001, Lu Daopei Medical Group claims to be China’s top hematology specialist and a pioneer in bone marrow transplantation. It operates four hospitals in Beijing and Shanghai.
According to AVCJ Research, Investcorp participated in a RMB500 million ($72 million) Series B round alongside Temasek Holdings. This was followed by a RMB100 million extension featuring China Merchants Securities Capital, Partners Capital Group, China Fellow Partners, SBCVC, and Yueyin Venture Capital. Previous backers include CBC Group and Hillhouse Capital.
WeDoctor was formed in 2010 as Guahao, a portal that connected patients with hospitals and doctors. It now has more than 240 million registered users for online appointment booking, prescription, and diagnosis services. The company also operates a digital healthcare infrastructure platform that links hospitals and doctors with patients, pharmacies, insurance programs and financial services. WeDoctor established China’s first internet hospital.
The company was transformed when Tencent Holdings invested $100 million in 2014 and integrated the service with its WeChat messaging platform. WeDoctor’s most recent funding round came in 2018, when Hong Kong-listed insurance company AIA Group and infrastructure and services conglomerate NWS Holdings led a $500 million investment at a valuation of $5.5 billion.
“We believe that there are many attractive opportunities in the Chinese healthcare sector as this is a pivotal time to meet increasing demand for quality medical services and treatments,” Mohammed Alardhi, executive chairman of Investcorp, said in a statement.
The firm, which has $32.2 billion in assets under management, said in 2019 that it wanted to build out a $50 billion Asia portfolio within seven years. Early moves included the acquisition of a private equity and real estate platform in India and a partnership – and now a joint fund – with China Everbright targeting technology investments in China.
More recently, Investcorp launched a fund with China Resources Group and Fung Strategic Holdings that focuses on food-related assets. Last month, the fund participated alongside China Resources Capital in the acquisition of a 65% stake in Hong Kong retail and supermarket operator City Super Group.
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