WeDoctor, one of China’s leading online healthcare platforms, has secured over 1 billion yuan (almost $150 million) from an undisclosed state-owned industry investment fund in eastern China’s Shandong Province following setbacks in its attempts to raise capital through a public share sale.
The Tencent-backed startup collected the fresh funds from the state investor as Chinese startups face tighter listing rules, particularly if they collect sensitive user data like the medical information that WeDoctor handles, on top of the COVID-induced global market slowdown and a sluggish initial public offering (IPO) market.
The latest valuation of WeDoctor was not disclosed, according to a Monday statement released by Fosun RZ Capital, an earlier investor of WeDoctor.
The capital raise followed WeDoctor’s plan to lay off a substantial number of employees to a total of mid- to low-2,000s from about 4,000 last year, as it weighs going public through a potential merger with a special purpose acquisition company (SPAC), Bloomberg reported in March, citing people familiar with the matter.
Its reported move to pursue a SPAC listing marks the firm’s latest effort to go public, after an attempt in April 2021 when the firm filed for an IPO application in Hong Kong post the completion of a $400-million pre-IPO round. At the time, WeDoctor fetched a valuation of $6.8 billion with support from investors including Sequoia Capital China and Millennium Management at the end of 2020.
But the application lapsed in October 2021, six months after it was filed, with WeDoctor making little progress on the listing plan.
WeDoctor’s journey of pursuing a public listing dates back to 2018, when it was valued at $5.5 billion after raising $500 million in a funding round led by AIA Company Ltd, part of Hong Kong-listed insurer AIA Group, as well as infrastructure and service group NWS Holdings Ltd.
Its rival Ping An Good Doctor, a unit of Ping An Insurance, meanwhile had floated a $1.1-billion IPO in May that year.
Founded in 2010, WeDoctor provides a range of online solutions covering insurance policies, medical supplies, online appointment booking, and clinics. It is part of a flock of technology companies looking to leverage advanced technology to transform China’s fragmented healthcare market.
In China, the proportion of digital healthcare spending is expected to reach 20-25% of total healthcare spending eventually from just 7% in 2020, driven by the wider acceptance of online healthcare services during the pandemic, according to statistics from Ping An Insurance, China’s largest insurer by market value.