Vision Fund leads $319m round for China's XtalPi

Existing investors Tencent Holdings, Sequoia Capital China, China Life, and SIG re-upped. New backers include CICC Capital, China Merchants Bank International, Mirae Asset, CITIC Securities, CITIC Capital, Shunwei Capital, Oceanpine Capital, Foursquare Capital, and IMO Ventures. It is said to be the largest single funding round for a company of this type.

XtalPi was founded on the Massachusetts Institute of Technology (MIT) campus in 2014 by a group of Chinese quantum physicists. Its core offering is an algorithm that predicts the crystal structure of drugs. This is woven into a cloud-based platform that utilizes quantum physics, computational chemistry, and AI. In addition to predictions, it offers computer-aided rational drug design, whereby structures are tailored to capture a combination of properties.

Since its establishment, the company has provided drug R&D services to more than 70 pharmaceutical companies from the US, Europe, China, and Japan. Its flagship product is known as ID4.

"In the past few years, we have focused on building and improving the self-developed ID4 smart drug R&D platform. Through cooperation with major pharmaceutical companies and biotech companies around the world, we have continuously verified the advantages of the ID4 platform in terms of cost, speed and success rate," said Shuhao Wen, XtalPi's founder.

AI-enabled drug discovery allows developers to act with greater conviction - especially in areas like small-molecule drugs - knowing that their formulations can be validated to some extent. Narrowing the field of candidates to those most likely to succeed can significantly reduce a pharmaceutical company's costs.

Elsewhere in the space, last year Qiming Venture Partners led a $37 million Series B round for Insilico Medicine. In 2014, it became the first drug developer to use GAN – a generative adversarial network, whereby neural networks try to spoof one another with fake signals, creating a strong authentication system – to identify molecules. Once combined with machine learning, the system was able to generate novel molecules that could be used to disrupt the spread of certain cancers in 46 days. This kind of process normally takes up to a year.

A healthcare fund managed by China Life led a $46 million extended Series B for XtalPi in 2018. This followed an initial tranche of $15 million featuring Sequoia, Google, and Tencent. ZhenFund and FreesFund were among the earliest investors in the company, contributing a RMB32 million ($4.7 million) Series A round in 2016, according to AVCJ Research's records.

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• Topics
• Greater China
• Expansion
• Technology
• Healthcare
• China
• Pharmaceuticals
• artificial intelligence
• Morningside Technologies
• SIG
• Softbank
• Tencent
• Sequoia Capital
• CICC
• CITIC Capital
• Shunwei Capital Partners
• Oceanpine Capital