Raising Hundreds of Millions Amid a Funding Winter: How This Chinese Medtech Firm Soared Against the Odds

Recently, DK Medical Technology Co., Ltd. (hereinafter referred to as "DK Medtech") has just completed its Series E financing.The financing amount is up to hundreds of millions of RMB.The funds from this round of financing will be used to strengthen the manufacturing center and commercialization construction, further enhance DK Medtech's advantages in technology and product innovation, and simultaneously plan for overseas market investment and expansion.

In fact, DK Medtech's financing process can be described as steady and solid.

The joys and sorrows of humanity are not interconnected. The so-called "capital winter" perceived by countless people has been glaringly illuminated by the blazing fire of "hundreds of millions in financing" at DK Medtech.

Healthcare Investment and Financing in 2024 Becomes More Challenging: Narrowing or Inverted Gap Between Primary and Secondary Markets, IPO Wealth Creation Difficult, Equity Investment Market Restructuring, Resources Shift to More Promising and Certain Areas.Cautious investors are still looking for disruptive innovation technology trends, and the niche blue ocean in the medical device sector continues to be favored by capital.

DK Medtech is undoubtedly the absolute leader in China in the niche blue ocean sector of interventional balloons.Founded in 2015, DK Medtech is a Chinese innovative enterprise that covers the full range of interventional balloon products. The company has developed includingMore than ten types of balloons, including standard balloons, high-pressure balloons, scoring balloons, and drug-coated scoring balloons.Its product line covers the needs of almost all vascular interventional fields, including cardiovascular intervention, peripheral intervention, and neurointervention.

But merely focusing on the blue ocean niche track is not the key for DK Medtech to break through against the odds during the capital winter.Adhering to commercialization as its foundation, a company must be profitable regardless of its valuation. This is the core underlying value that DK Medtech has always upheld.

As Weng Yulin, Chairman of DK Medtech, said: "Be cautious in financing, keep your promises, and make sure to earn the money back."Now that the capital market is deteriorating, it's a good thing for companies like us that focus on solid work rather than telling stories on paper, as it highlights our value."

For a medical device start-up company,Blue Ocean Track + Product Power + Sales Power = The Most Unshakable Competitiveness.

"Intervention without implantation" is the highest realm in the field of interventional treatment, and drug-coated balloons are rapidly replacing drug-eluting stents with advanced technology.As the concept of "intervention without implantation" deepens, the interventional balloon sector has become a fiercely contested "blue ocean" track.

Currently, most of the products available in the market are ordinary balloons without any special functions. DK Medtech not only achieves a full range of product layouts but also captures the trend of upgrading to special function balloons.Create a brand-new generation of blockbuster product —— High-pressure Engraved Drug Balloon.

Irregular expansion of conventional balloons tends to cause significant vascular injury, whereas the latest generation of scoring balloons increase pressure through axial cutting elements, inducing uniform longitudinal tearing of the vessel along the cutting elements.Reduce excessive vascular injury, easily dilate highly fibrotic and calcified lesions, and greatly assist with high-resistance lesions.

November 21, 2022, DK MedtechDKutting™ Scoring BalloonDilation Catheter Receives NMPA Approval for Marketing. DKutting™ High-Pressure Scoring Balloon,The First High-Pressure Directional Dilation Balloon for Peripheral Vessels Approved in China, This product adopts an exclusive patented design, combining excellent passability with directional expansion capability, offering a new choice for patients with peripheral vascular diseases and clinical surgeons.

In July 2023, DK Medtech was approved for listing.The world's first triple-combination peripheral scoring drug-coated balloon, Dissolve AV, integrates "high pressure," "scoring," and "drug" functionalities.By achieving a high burst pressure and high expansion success rate, reducing vascular over-injury with scoring, and inhibiting postoperative intimal hyperplasia with drug coating, multiple pain points are addressed simultaneously with one product.

When discussing the market entry point for entrepreneurship, Weng Yulin from DK Medtech proposed three priorities,Focus on large products in major fields first, then large products in niche fields, and finally small products in major fields.The first type is rare and hard to come by, while the latter two are the norm for entrepreneurship, but one must always keep a close watch on the first type of opportunity.

Scored drug-coated balloons are undoubtedly the first category.By 2024, the global market size for scored drug-coated balloons will exceed 10 billion yuan, with an annual compound growth rate of over 50%.Although the Chinese market has just started, with a penetration rate of less than 5%, it indicates that drug-coated balloons have enormous growth potential in the Chinese market when compared to developed countries where the penetration rate exceeds 20%.

Weng Yulin once publicly stated in an interview that after the launch of DKutting™ High-Pressure Scoring Balloon,It is expected to sell 50 million in the first year, at least 100 million in the second year, and reach 200 million in the third year.

In addition, the latestThe AV Peripheral Scoring Drug-Coated Balloon by DK Medtech is a revolutionary product in the field of arteriovenous fistulas.Can comprehensively address the clinical pain points of hemodialysis access; currently used high-pressure balloons may be replaced.

The市场规模 of drug-coated balloons for hemodialysis access in China will expand to by 2030.2.4 billion yuan, with a compound annual growth rate of 48.7%, relying on this unique product,DK Medtech expects to capture 30%—40% of the market scale in the coming years.

Ten years ago, a surge of capital flowed in, and innovative medical device companies could easily craft a story favored by investors simply by occupying a blue ocean market or launching a first-of-its-kind product; ten years later, as capital rapidly receded and innovative products became oversaturated, even the once-blue-ocean field of interventional balloons now requires companies to demonstrate robust commercialization capabilities to achieve self-sustained growth and win investor favor.

For start-ups, the commercialization of medical devices is extremely challenging, especially for those founded by technical teams.The commercialization of DK Medtech, however, was rooted in its founding and has run through its growth path.

Unlike most technical teams that recruit sales leaders from foreign enterprises or large corporations,Weng Yulin, Chairman of DK Medtech, has chosen to personally take the stage,Led the establishment of a nationwide sales team in China, reaching out to department heads and agents, presenting products, thereby building a comprehensive sales network system for DK Medtech.

Weng Yulin's sales methodology is actually quite simple:People must take on difficult tasks, and founders even more so. Sales is the hardest, so one must step up personally.

In terms of product commercialization,DK Medtech focuses on attracting industry giants' attention with outstanding single products in niche markets and leveraging their power to comprehensively promote product commercialization.

As early as 2022, when DKutting™ Scoring Balloon was first launched,DK Medtech has reached a strategic cooperation with Medtronic,To advance the sales and commercialization of this product in the Chinese market; just this month (July 2024), the two parties further deepened their comprehensive cooperation for this product in the Chinese market.

In addition, in 2023, regarding the two products of the intracranial balloon dilation catheter DKloud full exchange system and rapid exchange system, DK Medtech and Medtronic have once again established a partnership to promote the rapid commercialization of these products in China.

Medtronic becomes the domestic general agent of DK Medtech's products in China, launching a new cooperation model between foreign medical enterprises and local emerging medical enterprises, which also represents the recognition of top cardiovascular giants for DK Medtech's products.

DK Medtech Chairman Weng Yulin has a clear positioning for the cooperation with Medtronic:In recent years, the concentration of cross-departmental product certifications has increased, and the promotion window for products is short. If China's medical market were to completely build its own sales team, it would take a long time to cultivate an experienced team. This collaboration with Medtronic on the marketing of certain products represents an optimized use of resources.

If 2015 is referred to as the "first year" of healthcare investment in China, 2024 marks the tenth year. A decade later, the wave of capital has receded, and the era when investors would buy into a good story alone is long gone. Many innovative companies approaching the threshold of going public now face their toughest tests.

According to the official websites of the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange,In the past year, 27 medical device companies have successively terminated or suspended their IPOs.

Looking at the global medical device market, shifting from revenue growth to profit optimization has already become the common answer among executives of 600 medical device companies worldwide.The global medical device industry is undergoing unprecedented changes, and a new era of growth and profitability has fully arrived.

Looking back at the vascular intervention market, the once flourishing fields such as neurointervention and structural cardiology still haven't found the path to profitability, and are even struggling with deficits or facing closure.

Despite the capital winter, DK Medtech has still achieved remarkable growth, successfully secured financing, and realized profitability. This undoubtedly serves as a valuable reference for the cardiovascular intervention field and even the entire innovative medical device track.