Yuanhe Origin's Fe Jianjiang: Deep Cultivation in Early-Stage Investing Across Six Key Cities

“Early-stage investment firms are the farmers of the investment world.”Fei Jianjiang, Managing Partner of Yuanhe OriginIt is often compared in this way.

Established in September 2013, this early-stage venture capital firm under the Suzhou Yuanhe Holdings Group focuses on start-ups and growth-stage enterprises in the pharmaceutical/healthcare and hard technology sectors. After nearly a decade of dedicated efforts, Yuanhe Origin has achieved remarkable success. As of October 2022, Yuanhe OriginOver 250 projects under investment; 87% of the invested and managed projects are in the seed or start-up stage., including such star projects as Cambricon, Tianzhun Technology, CStone Pharmaceuticals, Ascentage Pharma, and Singleron.

▲ Selected Investment Cases by Yuanhe Origin

In fact, Yuanhe Origin was determined from its inception."Early Stage and Technology"Two Major Labels: Witnessing the Turbulent Evolution of China’s Early-Stage Investment Market Amid Their Own Growth

Since entering the industry in 2001, Fei Jianjiang has spent more than 20 years navigating the investment sector.

Before entering the investment circle, he was already the president of the Suzhou Industrial Park Branch of Shanghai Pudong Development Bank, “with a dedicated car at his disposal and people coming to his office to seek him out.” Yet this enviable lifestyle was somewhat troubling to him.

“It’s so tedious. The day-to-day repetitive work at the bank left me feeling a profound lack of accomplishment. Sometimes, people need a bit of uncertainty in their lives,” Fei Jianjiang remarked in an interview.

Thus, the adventure-seeking Fei Jianjiang resigned from his position as president of a bank to participate in the establishment of what would become Yuanhe Holdings’ predecessor—CSSD Venture Capital. After 13 years on this state-owned platform, Fei once again embraced new uncertainties by stepping down from his role as Executive Vice President of Yuanhe Holdings to lead an early-stage team in founding Yuanhe Origin.

However, unlike most investment firms at the time that focused on mid-to-late stages, Yuanhe Origin positioned itself with the label of “early-stage + technology.”

"As is well known, betting on early-stage ventures entails assuming higher risks, and a focus on technology places greater demands on team capabilities."Yet technology can transcend economic cycles, serving as the fundamental force driving human progress.“Based on the background and DNA of its core team, Fei Jianjiang identified technology and healthcare as the two major strategic tracks for Yuanhe Origin.”

At the same time, Yuanhe Origin places significant emphasis on recognizing differences—seeking not conformity but diversity—by identifying frontier technology companies that are undervalued in their early stages., capitalize on cognitive disparities to achieve higher returns before market consensus is formed. Once these initiatives gain broader social consensus, Yuanhe Origin will not only reap tangible benefits from corporate growth but also wield greater influence within the industry.

YesAscentage Pharmainvestment is one of the successful cases where Yuanhe Origin achieved excess returns by recognizing differences.

In 2015, when Yuanhe Origin invested in Ascentage Pharma, healthcare projects did not enjoy the high level of investor enthusiasm seen today. There were few investment firms specializing exclusively in the healthcare sector. Moreover, the Ascentage Pharma team had experienced significant setbacks in their previous entrepreneurial ventures, and the company’s work was highly innovative, focusing on a novel therapeutic target. For such an innovative drug developer—one of the few in China deeply engaged in research and development along the apoptosis pathway—market investors remained on the sidelines, with no one stepping forward to lead the financing round. Within Yuanhe Origin, there was considerable debate; it took three repeated reviews by the investment committee before the firm finally decided to lead that round of financing.

It was precisely this project, which was initially viewed with skepticism, that established Yuanhe Yuandian’s reputation and delivered substantial returns. On October 28, 2019, Ascentage Pharma listed on the Hong Kong Stock Exchange. Its share price surged by 54.97% at the opening, bringing its market capitalization to HK$11 billion. During the global offering, it achieved a 751-times oversubscription rate, setting the record for the highest oversubscription multiple for an IPO in 2019.

In early-stage investments in the healthcare and technology sectors, companies often do not yet have concrete products, making it extremely challenging to assess their future prospects. This underscores the need for investment firms to have a deeper understanding of the industry and technological trends.

Therefore, when discussing how to capitalize on early-stage hotspots, Fei Jianjiang stated,Extensive industry research is a fundamental skill for early-stage investors,The purpose of conducting industry research is to analyze and judge future industrial trends, and then find the gold buried in the sand.

In addition to in-depth research on industries and technologies, early-stage investment institutions also need a rich and robust ecosystem network, including entrepreneurs, industry resources, government entities, and investors.

After spinning off from the state-owned enterprise, Fei Jianjiang established a unique investment model for Yuanhe Origin, namely“Regional Focus, Intensive Cultivation.”

“The core objective of this strategy is to ensure that Yuanhe Origin can firmly establish its presence in China’s most economically vibrant cities,” said Fei Jianjiang.

Specifically, Yuanhe Origin willInvestment focus is on the six economically developed cities of Beijing, Shanghai, Guangzhou, Shenzhen, Suzhou, and Hangzhou, with local teams established.. This not only reduces the frequency of business trips for team members, enabling the team to evaluate the maximum number of projects within a limited timeframe, but also fully leverages the team’s local networking advantages to establish a more extensive project information network in the region, allowing them to identify new local projects at the earliest opportunity.

In addition, Yuanhe Origin also providesEach local team in every region is supported by an angel fund dedicated to that specific region., led by local team leaders, established close ties with the local government through the Angel Fund, making it easier to pool local resources, which also helped Yuanhe Origin become a “good farmer.”

Just as with growing crops, Yuanhe Origin, as a fund focused on early-stage investment, not only plants the seed of startups but also places great emphasis onResource Empowerment Capabilities in Post-Investment Management, “Water it and fertilize it; as it grows a bit larger, protect it from pests and shield it from wind and rain.”

“Various government incentives, such as rent-free subsidies, may seem insignificant to large corporations, but for startups, these subsidies of two to three million yuan are highly impactful, providing enough runway to sustain operations for several months,” said Fei Jianjiang. After investing in early-stage enterprises, Yuanhe Origin not only strategically aligns with the industrial chain to foster synergy and helps companies connect with upstream and downstream resources, but also leverages its state-owned background and local angel funds to make effective use of government resources.

Taking Yuanhe Origin’s investments in Guangzhou as an example, in addition to providing strategic advisory services and facilitating industrial resource synergy, Yuanhe Origin has also been heavily involved in supporting enterprise development. This includes assisting companies in securing land allocations from local governments and accelerating the construction of production facilities. “Land resources in Guangzhou are extremely scarce. If enterprises apply for land on their own, they face a lengthy process of evaluation and queuing. Since we have established a foundation of mutual trust with the government, they place considerable confidence in our assessments of these enterprises,” said Fei Jianjiang.

In recent years, against the backdrop of the rapid integration of internet technology into the healthcare sector and a startup era dominated by the trend of “domestic substitution,” the low-hanging fruit has largely been harvested. Future opportunities will increasingly belong to those with frontier achievements rooted in original innovative technologies. This shift is prompting investment institutions and industry players, primarily enterprises, to turn their attention upstream, making early-stage and small-scale investing a major trend.

As capital crowds in, the industry’s rapid expansion is often accompanied by overheating; the early-stage medical investment market is currently experiencing a significant bubble. In response, Yuanhe Origin has implemented a series of targeted adjustments to seek a new balance.

Fei Jianjiang stated that Yuanhe Origin will adhere to its two core identifiers, “early-stage” and “technology,” continuing to focus on early-stage projects with technological advantages and competitive barriers. In the future, Yuanhe OriginMake the labels more prominent。

On one hand, for early-stage investments, Yuanhe Yuandian has adopted a straightforward and aggressive approach since last year, namelyIn principle, only invest in the first two rounds of startup financing.; On the other hand, in the fields of healthcare and hard technology, Yuanhe Origin will adjust its strategy according to the development of specific sub-sectors. For instance, during the first five years, Yuanhe Origin allocated a significant proportion of its investments to new drug R&D. However, in its latest fund launched three years ago, the firm has reduced its exposure to this area while appropriately increasing the allocation to medical devices and diagnostics projects.

“Our technology investments revolve around two main themes:First, disruptive and innovative technologies; second, innovative applications of relatively mature technologies in relatively mature commercial scenarios..” Fei Jianjiang told Chengguo Bureau.

In the face of cyclical economic adjustments and industry bubbles, Fei Jianjiang’s adjustments have been not only strategic but also psychological, as he has publicly stated, “Whether entrepreneurs or investors, we must maintain confidence in the future and wait for the situation to become clear.”