BlueRun Ventures Seeks the 'Next Big Thing' in Biotech Amid Value Rationalization Era

BlueRun Ventures China’s focus on the healthcare sector dates back 10 years.

In 2012, before the surge of internet healthcare, BlueRun Ventures China had already begun focusing on how digital technologies could upgrade the traditional medical services industry. It successively invested in leading companies in the digital health sector, including Chunyu Doctor, Xingshulin, and Shuomao Technology. This forward-looking early positioning yielded substantial returns for BlueRun: in 2020, Baike Mingyi, an early portfolio company of BlueRun, was acquired by ByteDance for hundreds of millions of yuan; in 2021, Waterdrop Inc., which had received multiple rounds of investment from BlueRun, went public in the United States, becoming the first Chinese insurance technology company listed on the New York Stock Exchange.

In 2015, two major policy developments reshaped China’s pharmaceutical industry: the July announcement by the China Food and Drug Administration (CFDA) on the verification of clinical trial data, and the August release of “Document No. 44” by the General Office of the State Council—titled “Opinions of the State Council on Reforming the Review and Approval System for Drugs and Medical Devices.” These milestones marked China’s formal transition from an era dominated by generic drugs to one driven by innovation. To date, China’s healthcare sector has fundamentally transformed into an emerging technology track centered on innovative technologies.

Investors need to delve deeper into more substantive and technically rigorous areas, which places higher demands on the team’s professional expertise and industry experience. Against this backdrop,BlueRun Ventures China has established a biotechnology team and has already invested in multiple technology-leading innovative enterprises in fields such as AI-driven drug discovery, proteomics, high-end medical diagnostics, and cell therapy.

Although the team was formed relatively recently, it is in fact a battle-hardened group. Its members have not only led investments in star projects such as MicroTech Biopharma, Cathay Biotech, and Burning Rock Dx, but also participated in the investment and IPO processes of companies including BioCyto, Aim Vaccine, and Novogene. Furthermore, BlueRun Ventures China placed strong emphasis on interdisciplinary expertise when assembling this team. In addition to their professional knowledge in biomedicine, most team members possess backgrounds in cross-disciplinary fields, along with extensive experience and a strong track record in primary market investments.

Over the past two years, the volatility in the biotechnology industry has seemed elusive. Although long-term capital market reforms—such as the STAR Market and Hong Kong’s Chapter 18A listing rules—represent significant positive developments, the substantial stock price corrections of biotech companies in the secondary markets since the second half of 2021 indicate that their valuations are gradually returning to rational levels.

At this juncture, BlueRun Ventures China, in building its biotechnology team, must further demonstrate its ability to select for “technological innovation.”Rong Jing, Managing Director of BlueRun Ventures China“Tell VCBeat that investors need to align with the true laws of industrial development, recognize that certain factors in the external environment remain unchanged, and avoid being overly influenced by external distractions. ‘This adjustment presents an excellent window for both investors and entrepreneurs to calm down and focus on the industry. We all need to adapt to the evolving times by refining our investment logic and strategic planning.’”

In the course of increasingly in-depth investment activities,BlueRun Ventures China remains optimistic about the future development of biotechnology and will adhere to an overarching investment strategy: guided by technological innovation, it seeks out next-generation biotechnology companies that align with industry logic.

The biotech sector is undergoing a value reversion.

From a macro perspective, the international environment remains complex, the pandemic continues to rage, and the global economy is in downturn. From an industry perspective, domestic innovative drugs face intense homogenized competition, volume-based procurement is squeezing profit margins, valuation bubbles are gradually bursting, and capital is adjusting its market expectations.

How Should Insiders Interpret Such Shifts in Market Temperature?For BlueRun Ventures China, adhering to the logic of industrial development has been the consistent value orientation of its biotechnology team.“If one remains unperturbed by market sentiment, it becomes clear that the underlying logic of the biotechnology sector has remained unchanged, holding significant long-term potential. Periods when the market returns to rationality often present excellent entry opportunities. When I first began investing in biopharmaceuticals in 2013, innovative drugs were a relatively niche segment. Today, I receive business plans from several innovative drug companies across different fields almost every day,” said Rong Jing, Managing Director at BlueRun Ventures China.

Having determined the need for robust and sustained intervention, the next question is: What will the “next-generation biotechnology company” look like? The biotechnology team at BlueRun Ventures China believes that,Limiting oneself to a single technology is narrow-minded. Therefore, BlueRun Ventures China does not define market segments by products or services, but rather treats the demand side as a distinct segment, evaluating the feasibility and barriers of technological innovation around specific needs.For instance, the needs of oncology patients are entirely different from those of obese patients. Another emerging need is how to liberate laboratory physicians from tedious tasks by leveraging highly intelligent equipment to enhance accuracy while reducing costs.

From the perspective of solutions, innovative technologies are continuously emerging in every niche sector. In the view of BlueRun Ventures China, these tracks all hold the potential to give rise to the next generation of biotechnology companies.

Taking the innovative drug sector as an example, market hotspots have shifted rapidly from small-molecule chemicals to large-molecule antibodies and then to cell therapies. At present, the innovative drug landscape is flourishing with diverse advancements. For instance, the integration of small-molecule drugs with AI technology, various designs of antibody-drug conjugates, cell therapy products with different mechanisms, vector development for gene therapy drugs, applications of small nucleic acid drugs in different disease areas, and the expansion of mRNA technology in viral and oncology fields all have the potential to become next-generation mainstream biotechnologies.

From the perspective of CXOs with relatively fixed business models, digital CROs, CDMOs in the CGT sector, R&D service companies based on organ-on-a-chip technology, and AI-driven end-to-end drug design service providers also have the potential to become key players in the future.

However, for startups to stand out, they must also possess exceptional adaptability.It is particularly important for biotechnology companies to formulate strategies based on the conditions of different markets.

For instance, from the perspective of product positioning, biotechnology companies must consider differences in payers across markets and align with the distinct purchasing logics of each. In the U.S. healthcare payment system, commercial insurance plays a dominant role. In contrast, in China, public healthcare institutions are the primary providers of medical services, with public welfare serving as their fundamental mandate. The National Healthcare Security Fund is the main source of healthcare expenditure, and the government holds core bargaining power. Therefore, if a pharmaceutical company’s product targets the mainstream Chinese healthcare market, product pricing and cost control become critical, and technological innovation must also be designed in alignment with this commercial logic.

Furthermore, entrepreneurs must map out their future capital market pathways from the very inception of the company. Given that the A-share, U.S., and Hong Kong stock markets each have distinct listing requirements and investor preferences, a company’s pipeline planning, product/service positioning, and commercialization strategy must be tailored accordingly. Investors, too, should continually ask themselves these same questions when evaluating projects.

When selecting projects, BlueRun Ventures China prioritizes three factors:Technological leadership, team background and execution capabilities, and commercial feasibility.BlueRun Ventures China has focused its attention on six niche sectors and shared the underlying strategic rationale with VCBeat.

In recent years, the market has seen the emergence of healthcare consumption demands at various levels, many of which differ significantly from the traditional understanding of basic medical needs. For instance, the beauty aspirations of women in the new era have spurred the development of major products such as Sculptra-like fillers and collagen-stimulating injectables; young people are willing to spend tens of thousands of yuan on treating various diseases in their pets; urban residents seek weight loss and fat reduction without disrupting their normal daily lives; and parents are placing greater emphasis on myopia control and orthodontic treatment for their children.

Currently, some demands can already be met through safe and reliable biotechnologies. These products have established considerable technical barriers and can achieve commercialization through more market-oriented approaches, giving rise to numerous investment opportunities.

For a long period, the upstream biopharmaceutical supply chain and life science tools markets have remained dominated by foreign products, with domestic equipment holding less than 10% market share in many niche segments. As global supply chains undergo restructuring, import substitution and resolving foreign-dependent “chokepoint” vulnerabilities have become urgent priorities for China. In this regard, substantial policy support is being provided, creating significant investment opportunities.

Unlike downstream pharmaceuticals and medical devices, the barriers to entry in upstream biomanufacturing and life science tools lie more in the design of manufacturing processes, batch-to-batch consistency, and the ability to serve customers and meet customized demands. Excelling in these areas is no easy feat; it hinges largely on a company’s process know-how and quality control capabilities.

However, this segment is more commercially viable, with a relatively shorter R&D cycle and a clearer path to market. In the current capital winter, investors are increasingly risk-averse, making it a proactive strategy to focus on sectors with well-defined commercialization pathways.

Nucleic acid therapeutics are a key focus area for the BlueRun Ventures China team, who see several certainties regarding their long-term value.

First, with the market launch of mRNA vaccines and several blockbuster antisense oligonucleotide (ASO) and small interfering RNA (siRNA) drugs, the druggability risks associated with nucleic acid therapeutics have been largely mitigated. In 2002, the launch of Humira, the first fully human monoclonal antibody, ushered in two decades of explosive growth for monoclonal antibody therapies. Drawing a parallel with the developmental trajectory of monoclonal antibodies from two decades ago, the coming years are poised to be a period of significant fruition for nucleic acid therapeutics.

Second, constrained by bottlenecks in delivery systems and chemical modifications, its development has experienced significant setbacks. However, with technological advancements, the emergence of lipid nanoparticles (LNPs) and GalNAc has partially addressed the delivery challenges. If future delivery systems can be extended to specifically target other organs, it will further catalyze the development of oligonucleotide drugs, opening up boundless possibilities.

Furthermore, from the perspectives of cost and clinical demand, nucleic acid drugs are particularly well-suited to the needs of the Chinese market. Taking the PCSK9 target as an example, the siRNA drug Inclisiran requires only one injection every six months, whereas PCSK9 monoclonal antibodies necessitate two injections per month. Amgen’s PCSK9 monoclonal antibody, Evolocumab, was launched in 2015 and achieved annual sales of $1.1 billion in 2021. From the standpoints of cost and medical convenience, a therapy administered via intravenous injection in a hospital setting once every six months aligns especially well with the clinical demands of the Chinese market.

With the invention of CRISPR technology, gene-editing therapies have surged in recent years and are currently one of the market’s hotspots. Meanwhile, emerging technologies such as base editing offer superior scalability.

Compared with CRISPR gene-editing tools, the primary advantage of base editing is that it can perform edits without inducing double-strand DNA breaks, thereby offering enhanced safety; it can be regarded as an iterative version of gene editing. With the continuous emergence of new gene-editing technologies, in addition to base editing, prime editing and other novel approaches enable safer and more efficient editing. These emerging technologies are poised to facilitate a transition from ex vivo to in vivo direct gene editing, and to expand applications from rare diseases to chronic diseases, presenting substantial potential for future development.

Gene editing therapies are still in the early stages of industrial development, with significant risks primarily concentrated in the field of rare diseases. Compared to small nucleic acid drugs, their commercialization prospects remain highly uncertain. However, for BlueRun Ventures China, betting on innovative technologies at an early stage is inherent to early-stage technology investment.

The integration of AI and BT is a definitive trend in biotechnology. For the pharmaceutical industry, AI technology can significantly enhance the efficiency of drug R&D and gradually demonstrate its advantages in target discovery and structural design. Meanwhile, BlueRun Ventures China is also closely monitoring the application of AI in other medical fields, such as the combination of AI with IVD devices. Compared to AI-driven drug discovery, this approach is easier to validate and more conducive to large-scale adoption.

At this juncture, AI-driven drug discovery should be viewed from two perspectives. On one hand, the sector has moved past its bubble phase, with its value gradually returning to rational levels, making it nearly an opportune time for investment. On the other hand, it is essential to recognize that AI-driven drug discovery is still in its early stages; it will take considerable time and process validation before it can fundamentally transform pharmaceutical development. Both investors and entrepreneurs must respect the inherent laws of biotechnological advancement and maintain a rational outlook.

In 2019, when synthetic biology was still a niche field, BlueRun Ventures China led an investment in Cathay Biotech. Within a year, Cathay Biotech went public on the STAR Market, becoming the first synthetic biology company listed on this board. Driven by the rise of carbon neutrality concepts, policy incentives, and technological advancements, synthetic biology has since become a major market hotspot.

Synthetic biology encompasses a broad spectrum, with fundamentally distinct industrial and investment logics across different sectors. For instance, pharmaceutical development must still adhere to the established industry paradigms of drug R&D; for bulk chemicals, product selection and large-scale industrialization capabilities are particularly critical. Success at laboratory or even pilot scales does not guarantee viability in mass production. Therefore, BlueRun Ventures China places particular emphasis on the industrial experience of synthetic biology company teams.

In fact, BlueRun Ventures China has always been an investment firm that places great emphasis on technological innovation and integration, thus paying particular attention to interdisciplinary projects within the biotechnology sector, such as brain-computer interface technology, automated equipment, DNA synthesis technology, biochips, and sensors.

Taking brain-computer integration technology as an example, it involves multiple interdisciplinary fields, including neurobiology, psychology, physics, computational science, and information science, each requiring substantial depth. “Brain-computer interface technology is currently in a very early stage of development, but once breakthroughs are achieved, there will be enormous market potential. We will maintain close attention,” said Rong Jing.

In the highly homogenized investment industry, “post-investment management” is one of the key areas that differentiate an institution. As one of the largest early-stage funds in China, BlueRun Ventures China leads the initial funding round for over 80% of its portfolio companies. These early-stage enterprises often lack well-established general functions such as talent acquisition, organizational structure, and compensation systems, thereby requiring active “support” from their investors.

BlueRun Ventures China’s post-investment services are jointly delivered by its investment team and middle- and back-office personnel. Through frequent communications, the firm identifies the genuine pain points and common needs of its portfolio companies, and provides targeted activities and services accordingly.

Whether pre-investment or post-investment, understanding entrepreneurs is always the primary imperative for investment institutions.The BlueRun Biotechnology team is a multidisciplinary group that combines industry background with professional expertise. This composite background not only enables deeper insight into the alignment between a startup’s team capabilities and its business planning, but also allows the team to approach issues from the entrepreneur’s perspective, gaining a profound understanding of the practical challenges faced during corporate development and providing constructive assistance.

Among the biotechnology team members at BlueRun Ventures China, one professional combines a Ph.D. in neurobiology with experience as a biopharmaceutical investor and an internet company founder. Another member holds a bachelor’s degree in Automation from Tsinghua University and a Ph.D. in Biology from the Academy of Military Sciences, with industry experience in innovative drug development; his doctoral research focused on the biological mechanisms of RNA. Additionally, several companies previously invested in by Rong Jing have achieved listings on the A-share, U.S., and Hong Kong stock markets, enabling him to provide concrete advice on corporate capital market planning and pathways.

VCBeat has learned that projects led by the BlueRun Biotechnology team include: Chipscreen Biosciences, the first innovative drug company listed on the STAR Market; Cathay Biotech, the first synthetic biology company listed on the STAR Market; Burning Rock Biotech, the leading company in tumor gene sequencing; InnoCare Pharma, a star enterprise in small-molecule oncology drugs on the STAR Market; Gushengtang, the first TCM chain clinic company listed on the Hong Kong Stock Exchange; Qihan Biotechnology, a gene editing technology platform company; Xueji Biotech, a rising star in the iPSC field; Beiheng Biotech, a leader in universal cell therapy; Jinyi Shengshi, a domestic leader in upstream biological manufacturing; and Xiamen Lipin, a proposed listing company specializing in improved new drugs.

Secondly,In the biotechnology sector, cross-disciplinary collaboration has become a significant trend., which poses a significant test to the breadth of resources available to startups. BlueRun Ventures China has invested in over 150 companies, many of which have become industry benchmarks across various sectors. Therefore, BlueRun not only helps its portfolio companies connect with diverse industrial resources but also facilitates cross-industry collaboration. In addition, the biotechnology team at BlueRun Ventures China proactively shares its resource pool with portfolio companies. The team includes formal advisors from top-tier pharmaceutical companies, and one of its Venture Partners has founded two beauty enterprises, all of which provide tangible support to portfolio companies.

In addition, BlueRun Ventures China also organizes unified roadshow events on an irregular basis to provide tangible assistance in the subsequent financing rounds of its portfolio companies.At the recently held “Frontiers of Everything” Demo Day, BlueRun Ventures China facilitated over 4,000 investor-founder matchmaking sessions for more than 70 portfolio companies.

In May 2022, BlueRun Ventures China successfully raised a new RMB 5.5 billion dual-currency fund against the market trend, setting a fundraising record for early-stage and USD-denominated funds in China in 2022. From raising RMB 3 billion in 2016 and RMB 3.5 billion in 2019 to RMB 5.5 billion in 2022, BlueRun Ventures China has demonstrated steady growth in its fundraising efforts. The recognition from limited partners (LPs) is attributable to BlueRun’s outstanding performance. With ample capital at its disposal, BlueRun aims to identify and support more valuable and innovative entrepreneurs in the market.

To achieve more efficient coverage of innovative projects and entrepreneurs, BlueRun Ventures China requires “T-shaped” talent in team building: individuals who possess not only industry insights and even entrepreneurial experience, but also cross-disciplinary capabilities in technology and finance. Meanwhile, BlueRun is also cultivating a richer resource ecosystem to enhance its engagement and connectivity with domestic and international research institutions, universities, and benchmark enterprises.

As a venture capital firm focused on early-stage startups,BlueRun Ventures China is bullish on early-stage entrepreneurial opportunities at the forefront of various sectors. By combining “technological innovation with business model innovation,” it aims to address industry challenges and enhance commercial efficiency, co-building a business ecosystem with entrepreneurs to deliver innovative value and empower the future.

Since its founding in 2008, BlueRun Ventures China has remained steadfastly committed to one mission: driving early-stage technology investments through industry research. “Investing in early-stage ventures requires a strong sense of conviction, while investing in technology further tests and highlights an investor’s ability to identify promising opportunities. All of this is predicated on genuine passion and expertise.” This statement by Chen Weiguang, Managing Partner at BlueRun Ventures China, not only reflects the firm’s 21-year dedication to technology investment but also articulates the vision and original aspirations of its newly formed biotechnology team.