Qinzhi Capital's 10th Anniversary: Co-Founding with Innovators to Outrun the Long Innovation Drug Cycle

In 2015, China’s venture capital community was immersed in a frenzy of internet-based business model innovation. Projects such as O2O (Online-to-Offline), the sharing economy, and social platforms became darlings of capital, while biomedical investment—particularly in the field of innovative drugs requiring long-term commitment—remained largely neglected.

However, Tang Dajie, then Vice President of Shenzhen Capital Group (SCGC), saw a different landscape. Between 2013 and 2014, he came into contact with a large number of scientists returning from overseas. “These individuals shared similar profiles: aged between 50 and 60, most had been sent abroad for state-sponsored studies in the early 1980s, possessing both profound academic expertise and industry experience,” recalled Tang Dajie. At that time, the aftermath of the financial crisis led to reduced investment in basic biological research in Europe and the United States, while the entrepreneurial atmosphere in China was thriving. This wave of returning scientists made him keenly aware that investment opportunities in China’s innovative drug sector were imminent.

Based on this assessment, he made a decision that surprised his peers at the time—quitting his job without another lined up to start his own venture, focusing on biopharmaceutical investment.

Behind this decision lay profound personal experiences. In 2013, while accompanying his father, who was undergoing cancer treatment at Nanfang Hospital, Tang Dajie witnessed long queues of patients waiting to pay their medical bills. “In such a large payment hall, people formed long lines, with many sitting on the floor.” This scene deeply moved him. “If we can develop more high-quality medicines that are affordable for ordinary patients, it would be worth dedicating my entire life to this cause.”

Historical coincidences often harbor inevitability. Just as Tang Dajie began to entertain the idea of starting a business, China’s innovative drug industry was undergoing a profound transformation. The year 2015, later hailed by the industry as “Year One of Innovative Drugs in China,” marked the beginning of reforms in the pharmaceutical regulatory system. Meanwhile, overseas-returned scientists, equipped with R&D concepts and technological reserves aligned with international standards, were poised to make significant strides in the domestic market.

Talent, technology, capital, and regulation—these four key elements converge at this moment. Tang Dajie founded Qinzhi Capital, positioning it squarely at the historical juncture of the rise of China’s innovative drug industry.

In 2013, at the inception of Akeso, its founder, Dr. Xia Yu, who was seeking financing, was introduced to Tang Dajie, then an executive at Shenzhen Capital Group (SCGC), through a mutual friend.

Tang Dajie clearly remembers the scene of their first meeting: “At that time, Akeso’s team consisted of only a dozen people, but the core team was exceptionally well-structured. First, the four founders had outstanding educational backgrounds. Second, they all had experience at major companies, with two coming from core departments of WuXi AppTec (formerly known as China-America Crown Bioscience), possessing comprehensive industry backgrounds. Furthermore, the team had clear divisions of labor, covering key areas such as R&D and process development. Most importantly, there was Dr. Xia Yu’s wholehearted dedication and perseverance. When I went to Heyuan for a meeting, she traveled to Heyuan; when I was in Guangzhou, she rushed to Guangzhou for discussions. This team composition and spirit of dedication gave me a strong sense that their probability of success was very high.”

Based on this assessment, at a time when investing in innovative drugs had not yet become mainstream, Tang Dajie vigorously championed and led Shenzhen Capital Group’s participation in Akeso’s Series A financing round. “This funding was truly a lifeline for Akeso at that time,” he noted. Subsequent developments have proven the foresight of this decision. “Akeso’s growth later exceeded all investors’ expectations, with each step advancing rapidly,” said Tang Dajie.

What impressed him most was that, prior to its Series B financing round, Akeso entered into a landmark business development (BD) partnership with Merck & Co., becoming a model for early-stage overseas licensing among Chinese innovative pharmaceutical companies. This deal propelled the company’s valuation from $300 million to $2 billion, strongly validating the value of its platform.

Subsequently, after establishing its own fund, Qinzhi Capital continuously increased its investment across three consecutive rounds from Series B to Series D, thereby completing a full-cycle investment journey spanning four rounds. In 2021, Qinzhi Capital exited its position in Akeso when the company’s market capitalization reached approximately HK$50 billion. The pooled funds invested in Akeso achieved an internal rate of return (IRR) of 50% and a distributed to paid-in capital (DPI) ratio exceeding 400%, delivering substantial returns to investors.

The investment journey in Akeso perfectly embodies Qinzhi Capital’s philosophy of “co-entrepreneurship and original investment.” “In fact, the starting phase is often the most challenging for many enterprises, so we place great emphasis on whether we provided the first round of funding,” said Tang Dajie. “While value investing is important, we advocate even more strongly for original investment. If two or three out of ten projects are those where we provided the initial capital and ultimately succeeded, that is what we value most.”

From investing in early-stage antibody drugs at its inception, to strategically positioning itself in innovative oncolytic virus therapeutics, and further pioneering entry into frontier fields such as exosomes, QinZhi Capital has consistently seized first-mover advantages ahead of industry booms.

“By investing at an earlier stage, we achieve better financial returns, while also committing to grow alongside startups.” This statement encapsulates the investment philosophy of QinZhi Capital, articulated by Tang Dajie.

InnoVir Pharma is a vivid testament to this philosophy. In 2013, Dr. Guoying Zhou returned from the University of Chicago to China to launch her startup, focusing on research into herpesvirus-targeted oncolytic therapy. Her mentor, Professor Bernard Roizman, is hailed as the “Father of Herpesviruses,” and Dr. Zhou herself exemplifies the qualities most valued by Qinzhi Capital.

“At that time, we evaluated nearly all oncolytic virus projects across China,” recalled Tang Dajie. “We ultimately chose to invest in Dr. Zhou Guoying’s team precisely because of the professionalism and dedication she demonstrated. She not only devoted herself entirely to R&D but also persuaded her husband, who had been working in IT in the United States, to return to China to co-found the venture.”

This decision reflects QinZhi Capital’s unique investment philosophy, which prioritizes people over technology. “For early-stage projects, technology is important but not the most critical factor,” summarizes Tang Dajie, who has established a clear set of criteria. “We place greater emphasis on the team, particularly the founder’s character. Specifically, founders are expected to make cash investments, commit full-time, maintain business focus, and demonstrate accountability and a spirit of sharing.”

From a technical perspective, Qinzhi Capital favors platform-based technologies. “We tend to invest in ‘egg-laying hens’—companies that can continuously generate pipelines based on a technological platform, demonstrating sustained innovation capabilities.” Akeso’s bispecific antibody platform and ImmuneOnco’s oncolytic virus platform are typical examples.

Based on the aforementioned criteria, QinZhi Capital has established a rigorous investment decision-making framework. The firm has implemented an “Industry Research Group Meeting” mechanism, under which cross-functional team discussions are mandatory prior to the formal initiation of any project. These discussions focus on analyzing niche sectors, competitive landscapes, market size, and development trends. Underpinning this mechanism is the company’s proprietary database of over 2,700 projects, accumulated over a decade, which provides substantial evidence and reference for investment decisions.

“We emphasize a ‘30% investment + 70% service’ model,” Tang Dajie described Qinzhi Capital’s differentiated approach. “Often, we engage before making an investment, providing ‘pre-investment services.’ This deep involvement allows us to thoroughly understand the companies and gives us greater confidence to uphold long-termism alongside entrepreneurs.”

In the Yinuo Micro project, Qinzhi Capital’s empowerment extends far beyond financial support. They assisted Yinuo Micro in establishing its presence in Shenzhen, co-founded the Shenzhen Jiyin Institute for Translational Medicine in Biopharmaceuticals, secured governmental resource support, and constructed an innovative “space + industry + fund” model by taking an equity stake in the Jiyin Biopharmaceutical Translation (Greater Bay Area) Base, thereby providing comprehensive support for scientist-led startups.

This model of deep empowerment is further exemplified in the case of Hertz Life. Dr. Charissa, the founder of Hertz Life, initially focused on the research and development of human mRNA vaccines. After settling into the Jiyin Biomedical Translation (Greater Bay Area) Base, in which QinZhi Capital holds a stake, her team re-evaluated the industry landscape for her and recommended a pivot to the pet vaccine sector. “While the human vaccine market is fiercely competitive, the pet vaccine segment still has significant untapped potential. More importantly, pet pharmaceuticals possess consumer goods attributes and have relatively shorter R&D cycles.” This strategic shift gained the approval of the founding team, prompting Hertz Life to rapidly advance the development of products such as feline castration vaccines.

Qinzhi Capital not only provides strategic advice but also deeply participates in corporate restructuring. “We assigned the head of our incubation team to serve concurrently as CEO, assisting the company in building its team from just the founder and one assistant at the outset to a professional team of over 50 people.” Currently, Hertz Life’s feline castration vaccine is expected to receive regulatory approval next year, positioning it to become the world’s first of its kind.

The transformation and growth of Hertz Life is a typical representation of Qinzhi Capital’s ecosystem-based investment model. By taking an equity stake in the Jiyin Base and engaging in deep collaboration with authoritative institutions such as the National Innovation Center for High-Performance Medical Devices, the Shenzhen Institute of Synthetic Biology, and the Shenzhen Zhongnongda Frontier Technology Research Institute, Qinzhi Capital has established a comprehensive “Space + Industry + Fund” empowerment system. This system leverages the platform to identify and introduce early-stage projects, utilizes industrial resources to provide precise positioning, and accelerates their development through fund investments, thereby creating a virtuous cycle.

By leveraging deep collaboration with scientific resources and industrial technology platforms, QinZhi Capital has built a full-chain ecosystem spanning from project incubation to commercialization. This ecosystem not only effectively lowers the entry barriers for early-stage startups and accelerates the pace of technological innovation, but also provides QinZhi Capital with a continuous pipeline of high-quality investment opportunities.

From 2015 to 2025, the decade traversed by Qinzhi Capital has witnessed the complete cycle of China’s biopharmaceutical industry—from obscurity to capital frenzy, and finally to a return to rationality.

In this highly volatile market, Qinzhi Capital has maintained the stability of its investment strategy while demonstrating the flexibility to adapt to market changes. This dialectical unity of change and constancy is the essence of its investment philosophy.

“What remains unchanged is our long-term conviction in biomedicine,” Tang Dajie stated firmly. “This industry is, in fact, in its nascent stage. Even if there was some bubble in the capital market over the past two years, it was merely a small ripple in the course of development.”

In 2024, as the biopharmaceutical industry weathered a capital winter and most institutions chose to wait on the sidelines, Qinzhi Capital went against the trend with 18 investments. “Investment is inherently counter-cyclical,” Tang Dajie explained his investment philosophy with a vivid analogy: “It’s like beachcombing. Small firms are like fishermen without large boats; we must go out to gather seafood during low tide, because only then can the shrimp and crabs on the tidal flats be seen most clearly. During market downturns, the companies that survive are the strong ones, and valuations return to rational levels.”

Meanwhile, Qinzhi Capital continues to evolve, maintaining a keen sensitivity to technological shifts. From its initial focus on innovative drugs to its strategic expansion into medical devices, veterinary healthcare, and synthetic biology, Qinzhi Capital’s investment portfolio has consistently kept pace with the times.

For instance, in AI healthcare investment, Qinzhi Capital has opted for a strategy of deep vertical specialization. “We are bullish on AI applications within specific verticals,” analyzed Tang Dajie. “One of our portfolio companies, Zhimou Technology, was founded by the former director of Shenzhen Eye Hospital, who has amassed 100,000 fundus photographs over more than 40 years, all personally annotated. It is this high-quality data that constitutes the true competitive moat in AI-driven healthcare.”

This “shift” is not a case of blind trend-following, but rather a rational choice grounded in in-depth research and industry insights. Qinzhi Capital continuously tracks frontier technological developments through regular internal industry sharing sessions, in-depth exchanges with pioneering scientists, and analysis of overseas investment cases.

After a decade of dedicated cultivation, QinZhi Capital has delivered an impressive track record: it has invested in over 50 projects, with 10 achieving initial public offerings (IPOs) and one exiting through merger and acquisition. Underpinning these figures is a rigorous investment decision-making framework and robust post-investment management capabilities.

The collaboration with Capital Medical University serves as a typical case: “We did not merely sign a framework agreement; instead, we established a seed fund to create a community of shared interests. This enables our portfolio companies to directly access the Principal Investigator (PI) resources across its 23 affiliated clinical hospitals, obtaining clinical feedback during the product development phase and significantly enhancing R&D efficiency,” stated the team leader.

Meanwhile, QinZhi Capital has developed a mature methodology for delivering robust returns to its limited partners (LPs). “For projects we are bullish on, we continue to increase our investment, but spread the risk by deploying capital through different funds. When valuations reach our expectations, we consider exiting our principal first to ensure the overall safety of the capital,” explained the team leader. This phased investment and risk-diversification strategy enables QinZhi Capital to maintain its early-stage investment characteristics while also meeting the return expectations of its LPs.

Standing at the threshold of a new decade, Tang Dajie has maintained the clear-headedness of an entrepreneur. “First survive, then extend your longevity, and ultimately thrive better than others.” This plain-spoken statement encapsulates his consistent business philosophy.

When discussing future plans, Tang Dajie remains forward-looking: “Cell and gene therapy will be the next key focus. As automation levels increase, the cost of cell preparation will drop significantly, and this cost advantage will enable Chinese companies to prevail in global competition.” Meanwhile, cutting-edge areas such as radiopharmaceuticals and AI-driven healthcare applications in vertical sectors are also part of his strategic roadmap.

In Tang Dajie’s vision, Qinzhi Capital will continue to adhere to its “original investment” strategy, both in the first decade and into the more distant future. “We aim to provide the first round of funding to our portfolio companies and accompany them through their growth and expansion until they go public. Although this path is more challenging, it is how true value is created.”

Amid the surging tide of pharmaceutical innovation in China, Qinzhi Capital has demonstrated the power of “co-entrepreneurship and original investment” over the past decade. As Tang Dajie stated, “Investing in biomedicine not only generates returns for investors but also helps patients. This dual value motivates us to stay the course.”