GPLP Summit 2022: Focusing on Value Creation and Investment in the Global Healthcare Industry

Driven by the dual forces of deepening industry insights and strengthening investment practices, limited partners (LPs) are increasingly active in direct investments. Top-tier general partners (GPs) are going full throttle on both fundraising and investing, with news of oversubscribed funds and lead investments frequently topping media headlines. Meanwhile, small and mid-sized GPs face ever-shrinking room for survival and growth; for them, choosing between a “large and comprehensive” versus a “small and specialized” development path is far less urgent than the immediate dilemma of “elimination versus survival.”

On the other hand, in terms of financing in the healthcare industry, the number of global and domestic healthcare financing deals in Q1 2022 both hit record highs, while capital enthusiasm moderated compared to the same period last year. A total of 56 financing rounds exceeding $100 million occurred in the first quarter. The number of financing deals in the tens of millions of dollars increased year-on-year, with biopharmaceutical companies showing a significant lead in this tier. Digital health startups also demonstrated remarkable performance.Item.

It is evident that during the reshuffling of the capital market and the adjustment phase of the startup ecosystem, capital and the healthcare industry continue to integrate deeply. Which high-growth potential sectors will emerge in the future healthcare industry? How should post-investment value creation for innovative enterprises be carried out? What roles should technology and capital play in medical innovation and the restructuring of the industrial landscape? With the slowdown in IPO processes, what are the future valuation trends for health and wellness IPOs?

The 3rd Future Healthcare Fund Partners (LP-GP) Summit, hosted by VB100 and VCBeat, will provide the answers. This summit will focus on value creation and value investment in the global healthcare industry’s capital markets, extensively connect with global healthcare fund partners, delve into the investment industry chain, review new insights from global healthcare investments, and look ahead to future trends.

Strategic Thinking: Evolution and Adaptation in Healthcare Investment

Innovation in the healthcare and life sciences sector is emerging rapidly, making it one of the most dynamic industries. The “Healthy China 2030” Planning Outline issued by the State Council points out that the market may experience explosive growth in the next 3–5 years. With continuous policy support and innovation-driven industry advancement, increasing capital is flowing into the blue ocean of healthcare, with more companies entering the field. The wave of venture capital and entrepreneurship in the broader health sector has arrived.

Seizing opportunities and riding the momentum are critical challenges for enterprises navigating market tides. Maintaining rationality and guarding against arrogance and impetuosity constitute the prudent mindset capital should adopt in response to ever-changing market conditions. Some perspectives suggest that “one of the drivers behind the surge in health and medical industry funds from 2015 to 2017 was the need for ‘integration of industry and finance,’ while in 2018, operational capabilities in medical assets and value-based healthcare became the next focal points for social capital participating in hospital development.” Returning to the present, have the participating entities, investment logic, and preferred sectors of industrial capital investing in healthcare companies undergone changes? Healthcare financing and investment data from 2021 indicate that the main participants of industrial chain capital remained concentrated among pharmaceutical companies and medical device manufacturers, consistent with previous trends. Notably, some CRO (Contract Research Organization) companies and a small number of healthcare service providers have also joined this group. In the post-pandemic era, capital’s investment strategy has increasingly focused on integrating industrial chain resources and expanding core business operations.

Innovation Upgrade: The Infinite Possibilities of the Collision Between Hard Tech and Cross-Border Capital

In recent years, shifts in technological paradigms have ushered in tremendous opportunities, sparking an explosion of novel innovations across fields such as infrastructure software, artificial intelligence, life sciences, immunogenetics, and precision medicine. The innovation and upgrading of the life sciences sector rely heavily on capital as a foundational enabler, with participation not only from investors within the healthcare industry chain but also from cross-sector capital.

In 2021, there were 100 investment and financing deals in the healthcare sector involving cross-industry capital. The participants in these cross-industry investments fell into three main categories: internet giants such as Xiaomi, Baidu, Tencent, and ByteDance; insurance capital represented by Sunshine Ronghui; and other industrial capital exemplified by Country Garden Ventures, Langzi Shares, and New Hope Group. Taking Country Garden Ventures as an example, it invested in five medical companies in 2021, covering areas such as wearable devices, medical robots, cardiovascular consumables, in vitro diagnostics (IVD), and skincare products, overall demonstrating a strong focus on hard technology. Compared to supply-chain-specific capital, cross-industry investors are more diverse in type, bringing greater inspiration and vitality to the market. Hard technology signifies breakthroughs in core technologies and serves as the key to unlocking the new era of the future. Advancing hard technology relies not only on scientists’ cutting-edge research but also on collaboration between enterprises and capital. Only through integration can endless possibilities be sustained.

Strategic Retreat for Advancement: Where Will Health Investment Anchor After the IPO Frenzy?

The sudden outbreak of the pandemic in 2020 fueled a surge in healthcare IPOs. The gold-rush era for healthcare companies ignited market enthusiasm, but in the aftermath of this frenzy, the macroeconomic environment has undergone irreversible changes, and a plateau phase has arrived. In this period of sober reflection, some investors recommend pausing and adopting a wait-and-see approach. While IPOs remain a haven for innovators, breaking the issue price has become commonplace amid uncertainty in the secondary market.

According to statistics, from 2021 to 2022, domestic healthcare enterprise IPOs were primarily concentrated in the biopharmaceutical and medical device sectors. Data from VCBeat Orange shows that in 2021, there were a total of 523 financing and investment events in China’s biopharmaceutical sector, representing a 57.1% increase compared to 2020; the total amount involved reached RMB 118.875 billion, a 34.5% increase over 2020. The small-molecule and large-molecule drug sectors gradually entered a bottleneck period in 2021. The primary drivers sustaining further growth in financing and investment within the biopharmaceutical sector in 2021 stemmed from frontier biotechnology tracks such as cell therapy, gene therapy, and nucleic acid drugs.

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Healthcare Fund Partner (GP-LP) Summit

Forum Time: Afternoon of June 15, 2022

Forum Organizers: VB100, VCBeat, Artery Orange, VCBeat Institute, Artery New Medicine