Deal focus: Weimai seeks healthcare monetization

China has witnessed the emergence of an array of online platforms that are designed to facilitate communication between doctors and patients, offering appointment-booking services, online consultations, and medical records storage. Two stand out by virtue of having leveraged the might of their parent companies to achieve significant scale.

Ping An Healthcare & Technology, which operates the Ping An Good Doctor app, claims to reach into 3,000 hospitals and 2,000 clinics, while Tencent Holdings-backed WeDoctor works with 240,000 doctors across 2,700 hospitals. Both are diversified platforms, with offerings that encompass pharmacies and insurance functions, but they rely ultimately on access to doctors and patients. Ping An leverages the Ping An Insurance network; WeDoctor has the WeChat user base.

Weimai, which recently secured $100 million in funding from IDG Capital and existing investors Source Code Capital, Matrix Partners China, Vision Plus Capital and Cenova Ventures, has a different approach. The company positions itself as a technology partner for public hospitals, which are often lacking in terms of IT systems.

"Other platforms have to build their own doctor supply, which means scalability and control over service quality is limited. Moreover, if they are collecting doctors directly, rather than through hospitals, it can be difficult because each department within a hospital has its own decision-making process," says Samuel Huang, a partner with Source Code.

Weimai focuses on China's 150 tier-three and tier-four cities, which have a combined population of more than 500 million. At present, it covers more than 150 million people across 70 cities in 17 provinces, working with 100,000 doctors in 1,000 partner hospitals. 

The company's edge is technology. The founder developed a platform that integrates with the internal systems of hospitals thanks to experience building IT infrastructure on a city-by-city basis. He applied elements of that modal to healthcare. The next step is using data from these systems to provide commercial services.

At present, Weimai isn't especially cash generative. The business model relies on persuading patients to use Weimai for more than just appointments. The plan is to move beyond remote diagnosis, prescription distribution, and payment processing and provide patients with treatment options not covered by the public health system. This is likely to involve making referrals to private clinics specializing in pediatrics and oncology, for example.

"Government-backed insurance programs in China only support irregular medical services. If patients need treatment that is high quality and more specialized, they must usually pay for it themselves," says Huang. "One of the challenges for Weimai is how to offer services that are attractively priced and of high quality."

Weimai has sold itself to hospitals by being localized. Its path to monetization depends on offering patients a similar kind of flexibility.   

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• Topics
• Greater China
• Technology
• Healthcare
• Expansion
• China
• IDG Capital Partners
• Source Code Capital
• Vision Plus Capital
• Cenova Ventures
• Matrix Partners