Youfu Medical Expands into Health-Focused New Consumption Sector, Opens 9 Outlets in One Year and Secures Tens of Millions of USD in Series B+ Funding

On November 30, VCBeat (WeChat ID: vcbeat) learned that UPMED, a brand specializing in orthopedic rehabilitation and sports medicine, officially announced the completion of its tens-of-millions-of-dollars Series B+ financing round. The round was led by Qianji Capital, with existing shareholder Changling Capital participating as a follow-on investor.

To date, UP Clinic has secured cumulative financing amounting to hundreds of millions of RMB, with an investor lineup that includes prominent firms such as Qianji Capital, Changling Capital, Matrix Partners China, and ZhenFund.

As a Sino-foreign joint venture chain medical institution, UP Clinic is dedicated to sports medicine, musculoskeletal rehabilitation, and the diagnosis and treatment of orthopedic-related conditions. It provides professional medical services to sports enthusiasts, orthopedic patients, post-operative individuals, and those in a sub-health state. Since the trial operation of its first chain rehabilitation outpatient clinic in July 2018, UP Clinic has expanded to five outpatient clinics and established Shanghai’s first rehabilitation medical center, with two additional facilities currently under preparation. Moreover, thanks to its excellent management capabilities, the clinic doubled its outpatient revenue during the pandemic and has cultivated and reserved a talent pool of nearly 100 outstanding medical professionals.

It is worth emphasizing that,This year, UP Clinic launched its sub-brand, UP Stretch, and opened eight stretching studios in the first half of the year., primarily concentrated in Shanghai’s core business districts, including landmark municipal construction projects such as Qiantan Taikoo Li and CITIC Pacific Plaza on West Nanjing Road, and was selected by iziRetail as one of the most noteworthy emerging consumer brands.Practical results have demonstrated UP Clinic’s ability to rapidly open and replicate stores, with a plan to open 20 additional locations next year.

In the medical field, rehabilitation medicine, alongside preventive medicine, clinical medicine, and healthcare medicine, is recognized by the World Health Organization as one of the “Four Major Medical Disciplines,” offering significant market potential in practical applications. According to a report by KPMG China, total consumption in China’s rehabilitation medical market grew from RMB 10.9 billion in 2011 to RMB 58.3 billion in 2018, representing a compound annual growth rate (CAGR) of 26.9%. The market size is projected to exceed RMB 200 billion by 2025, indicating sustained and steady expansion of the industry.

VCBeat conducted an in-depth interview with Sun Xiaoyi, founder of UP Clinic, to discuss the details of its latest funding round and the business rationale behind the opening of nine new facilities this year (one rehabilitation medical center and eight stretching studios). The interview provides a multi-faceted analysis of why UP Clinic continues to attract capital interest and achieve rapid growth.

Since its inception, UP Clinic has been committed to innovation and breakthroughs, and this year it has expanded into the emerging consumer health sector with the launch of its sub-brand, UP Stretch.

“UP Clinic, under UP Medical, specializes in providing medical services such as injury treatment, sports rehabilitation, and performance enhancement for sports enthusiasts, regular fitness practitioners, and adolescent athletes. Over the past few years, it has delivered a positive service experience to our members,” Sun Xiaoyi told VCBeat. “However, we have also found thatFor those who are not ill but in a state of suboptimal health, professional teams are also needed to help them improve unhealthy lifestyle habits. Thus, we have launched UP Stretching, a new trendsetting sports and wellness brand. We aim to make sports rehabilitation a part of people’s everyday lifestyle.”

Why choose to approach the topic from the perspective of stretching? How should we understand this new trend? Sun Xiaoyi stated that, as a method for sports rehabilitation and fitness,Stretching exercises can enhance the flexibility of ligaments, muscles, and joint articulation, thereby reducing the risk of injury.“Active individuals have a strong preference for stretching, yet there are few institutions in the market that professionally provide musculoskeletal health assessments and stretching services grounded in evidence-based medicine and anatomy.Stretching, as a novel experience, combines exercise and medicine. It is less fatiguing, helps relieve and relax muscles, and provides longer-lasting effects than traditional methods such as massage.”

Moreover, UP Clinic incorporates elements of youth and vitality into its store décor, logo design, and product offerings, while strategically locating its facilities in premier first-tier commercial districts. This approach enables users to better perceive and enjoy a cutting-edge sports rehabilitation experience.

Benefiting from UP Clinic's extensive expertise in sports rehabilitation, UP Stretching possesses significant advantages in both talent and technology.Take technology as an example. UP Clinic has established an in-house training academy dedicated to sports rehabilitation. Leveraging years of operational experience and the concerted efforts of a medical team comprising PhDs from both China and the United States, the clinic has developed a robust and scientifically grounded training system. As an integral component of sports rehabilitation, stretching techniques possess strong transferability in terms of technical application. It is precisely under these high-standard training protocols that UP Stretching is able to deliver professional-grade experiences and services to its users.

It is not difficult to see that, from a market perspective, compared with fitness personal trainers, massage parlors, and the like,UP Stretch is undoubtedly a trendier and more youth-oriented model within the broader health and wellness industry.. From a commercialization perspective, UP Clinic’s ability to rapidly open new stores and replicate its model has also been proven:The first store opened this January achieved break-even in just three months, and a total of eight stretching studios were launched within the first half-year.

It is worth mentioning that,UP Stretch and UP Clinic have formed a bidirectional positive feedback loop:UP Clinic specializes in the diagnosis and treatment of sports medicine, musculoskeletal rehabilitation, and orthopedic conditions, while UP Stretch primarily provides physical improvement services for athletes, individuals with suboptimal health, and those with post-operative needs. The two entities can drive mutual patient referrals. For instance, a patient who sustains a sports injury and receives treatment at UP Clinic can subsequently visit UP Stretch for further physical conditioning. This synergy enhances users’ recognition of the UP brand’s value.

Compared with hospital-based specialty departments within the rehabilitation industry chain, the niche segment of rehabilitation clinics where UP Clinic operates offers greater flexibility and demonstrates stronger competitiveness in terms of chain expansion and standardization capabilities.

Since its inception, UP Clinic has been dedicated to strengthening its capabilities in chain replication.To this end, UP Clinic developed the online management platform “Yi Shu” (from which UP Clinic originated). As a leading orthopedic patient management platform in China, it forms a closed-loop diagnosis and treatment system with offline rehabilitation clinics, thereby establishing UP Clinic as a sports medicine and orthopedic rehabilitation service provider capable of delivering comprehensive mid-to-long-term solutions that integrate “in-hospital + out-of-hospital” and “online + offline” care for patients. To date, UP Clinic operates five clinics.

Of course, in addition to business model construction, team DNA profoundly influences corporate development. Deeply embedded in the sports rehabilitation sector,UP Clinic's founding team has a strong medical background.Dr. Sun Xiaoyi earned her doctorate from the University of Sydney, Australia, and currently serves as a director of the Sports Rehabilitation Industry Alliance; Dr. Ye Tingjun graduated from Shanghai Jiao Tong University School of Medicine; Dr. Roger Zhao received his doctorate from the University of California, Los Angeles; and Dr. Cory Arth also holds a doctorate from the University of California, Los Angeles. Furthermore, the team includes the team physician for the Dutch Women’s Volleyball Team, the Chief Medical Officer of the Marine Corps, the team physician for the National Tennis Team, and the team physician for the National Canoeing Team, among others.

In addition, UP Clinic is a founding member of the Sports Rehabilitation Industry Alliance and a member of the China Non-Public Medical Institutions Association. UP Clinic also serves as the medical support team for major events such as the Shanghai Marathon, the ATP Masters 1000 Shanghai, and the IAAF Golden League.

To date, UP Clinic has garnered favor from numerous renowned investment firms, including Changling Capital, Matrix Partners China, and ZhenFund.

Wu Hai, Managing Partner at Qianji Capital, stated, “Qianji Capital has long been committed to identifying new technologies and business models driving the upgrade of China’s healthcare industry. The sports rehabilitation sector in China started relatively late, resulting in a significant gap compared to international standards in terms of awareness and technological proficiency. As a leading domestic sports rehabilitation enterprise, UP Clinic has established a ‘New Rehabilitation’ chain model focused on chiropractic care and sports medicine, achieving rapid growth. This success is partly driven by national policy support and rising public health awareness, which are gradually shifting the traditional treatment paradigm in China that prioritizes surgery over rehabilitation. It is also attributable to the team’s accumulated experience from their previous work with the ‘Yi Shu’ (Medical Data) platform. UP Clinic has built an internationally competitive medical technical team and training system. Building on the rapid expansion of its chain of rehabilitation clinics, the company is continuously exploring the fields of ‘sports stretching’ and ‘digital therapeutics for sports rehabilitation,’ demonstrating remarkable ability to expand beyond its core business and execute effectively. We look forward to supporting UP Clinic as it grows into an innovative leader in the sports rehabilitation sector, thereby accelerating the development of China’s sports rehabilitation industry.”

Regarding the follow-on investment in UP Clinic, Mr. Jiang Xiaodong, Managing Partner of Changling Capital, stated: “Congratulations to UP Clinic on completing its latest round of financing. Changling Capital is highly optimistic about the growth prospects of the rehabilitation industry. Leveraging its professional expertise, deep industry insights, and efficient operations, UP Clinic consistently delivers high-quality rehabilitation services to patients. It has designed diverse service offerings, such as outpatient rehabilitation clinics and stretching therapy, to address patients’ multi-level needs. Under the leadership of Mr. Sun, the team has built China’s largest chain of outpatient rehabilitation clinics over several years of dedicated effort. We will continue to support the company’s future development and help drive further advancement of the rehabilitation industry.”

Dr. Yu Zhiyun, Partner at Matrix Partners China, stated, “China faces a substantial demand for rehabilitation services, with rapid growth seen in both post-disease recovery and rehabilitation needs arising from sports activities. The supply within the public healthcare system is far insufficient, allowing the private sector to play a crucial complementary role. UP Clinic has assembled a team of highly specialized sports medicine physicians and physical therapists from both domestic and international backgrounds, and is committed to creating a high-quality patient care environment. Relying on word-of-mouth referrals, it has attracted a large base of loyal clients, including Olympic medalists. In recent years, leveraging its expertise in sports medicine, UP Clinic has expanded into the broader market for stretching services, reaching an inflection point for growth. We believe that UP Clinic will continue to thrive in the future.”

In recent years, the Chinese government has actively promoted the development of the rehabilitation medical market and encouraged private sector innovation and entrepreneurship in the field of rehabilitation.On June 16, 2021, the National Health Commission issued the “Opinions on Accelerating the Development of Rehabilitation Medical Services,” which proposed: promoting the transformation of some primary and secondary hospitals in areas with abundant medical resources into rehabilitation hospitals; supporting and guiding social forces to establish large-scale, chain-operated rehabilitation medical centers; and increasing the number of healthcare institutions providing rehabilitation medical services within their jurisdictions. It also called for innovating service delivery models in rehabilitation medicine, gradually advancing multidisciplinary collaboration between rehabilitation and clinical specialties, actively developing community- and home-based rehabilitation services, and fostering the integration and seamless connection between rehabilitation medical services and the provision of rehabilitative assistive devices.

It is foreseeable that, driven by national policy support and the sustained efforts of innovative enterprises represented by UP Clinic, China’s rehabilitation medical market will unlock greater potential.

Qianji Capital was established in 2010 and is one of the earliest professional investment funds in China focused on healthcare and life sciences, dedicated to promoting the transformation, upgrading, and innovation of China’s medical industry. Qianji Capital currently manages six healthcare industry funds denominated in US dollars and Chinese renminbi. Its limited partners include sovereign wealth funds and government agencies across Asia, as well as major domestic and international insurance companies and financial institutions.

Changling Capital, established in 2016, is a new generation of theme-driven venture capital fund. It is committed to investing in technology-driven business model innovations within five core investment areas: "New Healthcare Services," "New Medical Technology," "New Healthcare Infrastructure," "New Health Consumption," and "Novel Aging." Changling Capital has offices in Shanghai and Beijing, currently managing over RMB 6 billion in assets. Its limited partners include global top-tier institutional investors such as endowments from renowned universities and hospitals, foundations, pension funds, and leading funds of funds.