Pet Innovative Drug Developer Tengchuang Secures Tens of Millions in Angel Funding Led by Jinding Capital

Recently,Pet Innovative Drug CompanyShanghai Jianyi Tengchuang Biopharmaceutical Technology Co., Ltd. (hereinafter referred to as “Tengchuang”) has completed an angel round of financing amounting to tens of millions of yuan, with Jinding Capital serving as the sole investor. The proceeds from this round will be primarily used for product research and development, team expansion, and market development.

Tengchuang, established in 2022, is an animal health pharmaceutical company dedicated to improving animal healthcare standards. Leveraging its R&D experience and technologies from human pharmaceuticals, Tengchuang develops innovative pet drugs, high-end complex formulations, and innovative diagnostic reagents in accordance with international standards. Currently, Tengchuang focuses on innovative pet medicines as its core business, aiming to fill gaps in the domestic market.

With the sustained growth of the pet economy, rising social status of pets within households, and evolving pet-ownership habits, demand for veterinary pharmaceuticals has increased significantly. In particular, the aging pet population in recent years has greatly stimulated this demand. In 2022, Zoetis, the global leader in animal health, reported over $5 billion in revenue from its companion animal-related business.

Against the backdrop of a surge in demand, the supply of veterinary drugs for pets has become a key constraint on industry development. Addressing this supply issue is an inevitable path for the industry’s growth. Overall, there are three major developmental logics:

(1) Upgrade and Substitution: Currently, the industry supply mainly consists of veterinary drugs developed for economic animals. These drugs are primarily designed for large animals such as pigs, cattle, sheep, and horses, or poultry such as chickens, ducks, and geese. Due to differences in target animal species during the drug development process, such medications exhibit limitations in efficacy and safety when used in companion animals like cats and dogs. Furthermore, the variety of these drugs is limited; Document No. 2512 issued by the Ministry of Agriculture (now the Ministry of Agriculture and Rural Affairs) in 2017 listed only 183 approved drugs for pets, which is insufficient to address the complex and diverse range of conditions. In recent years, an increasing number of proprietary drugs specifically developed for pet diseases have entered the market, clearly upgrading and substituting the existing medications.

(2) Compliant Alternatives: Currently, a significant portion of drugs in the pet healthcare market remains human-use medications. These products hold a substantial position in the veterinary pharmaceutical market due to their high quality, diverse range, and affordable pricing. However, the off-label use of human drugs in animals carries significant legal and compliance risks. In recent years, regulatory authorities in many regions have intensified crackdowns on such illegal practices, implementing strict oversight and severe penalties. These measures have largely curbed the misuse of human drugs in veterinary care and further heightened market demand for compliant and effective veterinary pharmaceuticals.

(3) Market Gap: There is a substantial untapped market for pet medications. For instance, due to the systematic absence of an aging population in livestock—since economic animals are slaughtered upon reaching maturity—the veterinary pharmaceutical sector lacks drugs specifically targeting age-related conditions in pets. Furthermore, as the status of pets within families continues to rise and clinical standards in veterinary hospitals improve, leading to better diagnostic capabilities for various diseases, this market gap is becoming increasingly apparent.

The pet pharmaceutical industry possesses attributes of both the pharmaceutical and consumer goods sectors, resulting in high comprehensive barriers to entry. For innovative drug companies, four major challenges are prevalent: product selection, research and development (R&D) of active pharmaceutical ingredients (APIs) and formulations, regulatory review and approval, and market sales. In the product selection phase, multiple dimensions must be balanced, including market demand, R&D complexity, and promotion difficulty. From a demand perspective, due to the lengthy R&D and regulatory approval cycles for pet drugs, current market needs often differ from those projected five years into the future, requiring founding teams to have a deep understanding of the pet pharmaceutical industry. Pet drug R&D is constrained by the currently underdeveloped pet pharmaceutical ecosystem, which suffers from a severe shortage of R&D talent for relevant drugs. The regulatory review and approval phase faces issues such as stringent evaluation criteria and prolonged approval timelines. In the market sales phase, challenges include a fragmented hospital landscape and varying levels of professional competence among veterinarians. Overall, the pet pharmaceutical industry inherently has high barriers to entry, and companies capable of simultaneously addressing these multiple challenges are extremely scarce.

High industry barriers pose significant challenges to entrepreneurial teams, necessitating strong comprehensive capabilities. Tengchuang boasts a highly professional background in human pharmaceutical development and possesses profound insights into the pet pharmaceutical industry. For instance, since its inception, Tengchuang has adopted a product selection strategy driven by consumer demand, rather than extending existing technologies for product selection. It is committed to developing products that address high market necessity and critical pain points. To mitigate R&D risks, Tengchuang selects mature targets already validated in the human pharmaceutical sector and conducts research and development leveraging its experience and management systems from human drug development. Furthermore, Tengchuang has extensive experience in regulatory review, approval processes, and market sales.

As one of the earliest investment institutions to focus on the pet industry sector, Jinding Capital has established and managed pet industry funds totaling over RMB 900 million. It has garnered support from cornerstone investors such as China Pet Foods, Yiyi Shares, Yuanfei Pet, Tianyuan Pet, and Laiyifen, while also attracting participation from numerous enterprises and high-net-worth limited partners (LPs). The firm has completed investments in companies including Shuaike, Fubei, Xiaoke, Pat, Douchai, RedDog, Douai, pidan, Gaoyejia, Bukaxing, Xiaoyi, and Aichong, with more than 90% of its portfolio companies ranking first in their respective pet industry sub-sectors.

This investment is primarily conducted through the Yiyi Jinding Industrial Fund.，Yiyi Shares is one of the leading enterprises in China's pet supplies industry and a global leader in pet hygiene and care products. Committed to fostering a healthy and harmonious relationship between humans and pets, it leverages its proprietary resources and capabilities to drive the development of the domestic pet industry and provide support for the future growth of Tengchuang.

Regarding this round of financing,Cao Zijian, Founder of TengchuangStatement: As a research and development company dedicated to innovative veterinary medical products, our portfolio includes patented compounds, 505(b)(2) formulations specifically designed for pets, and novel veterinary diagnostic reagents, effectively addressing gaps in the domestic and international veterinary healthcare markets. Jinding Capital, as a specialized investment firm deeply rooted in the pet industry, has not only focused on the veterinary healthcare sector but also established extensive strategic layouts across the entire pet industry ecosystem. Through this partnership, Jinding Capital provides not only financial support but also leverages its years of expertise to offer valuable professional guidance for corporate development. Furthermore, its high-quality industrial resources will provide effective support for the company’s future growth. Both parties are committed to building an international enterprise with a global market orientation.

Head of the Consumer Business Division, Jinding Capitalstated: “Jinding Capital has long focused on the pet industry and its related sectors, maintaining a sustained interest in the field of veterinary pharmaceuticals. The veterinary drug industry is currently in its early stages, characterized by a fragmented market where consumers face high medication costs while veterinary hospitals suffer from drug shortages. There is an urgent need for more companies to engage in the research, development, and sales of new veterinary drugs. However, the development of new veterinary drugs presents significant challenges, including high complexity, long development cycles, and substantial entry barriers. For pharmaceutical R&D enterprises, this necessitates balancing heavy R&D investments against limited cash flow returns, posing considerable challenges. During our communications with Tengchuang, we observed that”“The Tengchuang team not only possesses strong professional R&D capabilities but also has a comprehensive understanding of the pet pharmaceutical industry. With mature experience spanning from drug development to consumer goods enterprise operations, it is well-equipped to address the challenges of industry growth. We believe that Tengchuang has the potential to become China’s leading high-tech pet pharmaceutical company.”