Jingyi Tech and Founder Li Zhi: Awaiting the Tailwinds in China's Healthcare IT Industry — Longmen Capital Investment Case

In every era, there is always a group of people who, like the ducks that are the first to know when the spring river warms, sense the shifting seasons and tides of the time while the early winter chill still lingers. KYEE is one such company.

From mobile healthcare to becoming a leading domestic provider of medical cloud products and services, and further to the upgrade into a builder and service provider of medical data platforms, KYEE has grown from a two-person team to its current workforce of 840 employees. Founded in 2004, KYEE has been in operation for 17 years. Seventeen is an age of greatest malleability for an individual, and likewise represents the most dynamic stage for an enterprise. How does KYEE summarize its past 17 years, and how will it calmly enter this new phase? To address these questions, VCBeat spoke with Li Zhi, founder of KYEE.

It took KYEE seventeen years to evolve from an accidental entrant in the healthcare sector to a leading provider of medical cloud products and services.

Since its founding in 2004, KYEE focused primarily on mobile nursing during its first decade. At that time, the market landscape for hospitals’ “four major systems” was already well-established, making it unwise to compete directly with established health IT vendors. Therefore, KYEE adopted a differentiated market entry strategy, targeting the blue ocean of in-hospital mobile healthcare.

In 2004, Li Zhi and his entrepreneurial partner Shao Huagang traveled to regions with advanced medical technologies, such as the United States and Japan, to identify promising startup opportunities that had not yet reached scale in China. Based on market research findings, they discovered that projects leveraging PDA handheld terminals—which already had mature application scenarios in the security and financial sectors—were highly compatible with hospital nursing workflows in the healthcare industry.

Act decisively when the opportunity is clear; KYEE has never been one for empty talk. Drawing on the momentum of mobile terminals in other industries, the company firmly believes that there remains substantial market potential for mobile devices within the healthcare sector. The only uncertainty lay in when this growth would explode. To address this, KYEE embarked on a prolonged journey of market education—a path it has been navigating for four years.

In Li Zhi’s words, market education was an arduous ordeal—tedious in process, capital-intensive, and marked by substantial losses. If so, why persist? “We served over a dozen clients, who provided highly positive feedback. After 2008, market responses became increasingly favorable, and revenue began to rise steadily.” This was not yet the ideal state Li Zhi had envisioned, but they kept their goals firmly in mind and gradually mapped out their blueprint through consistent action. In 2010, KYEE achieved annual revenue of RMB 10 million and reached break-even.

2012 was a pivotal year for KYEE. The company’s appeal caught the attention of the capital markets, with prominent domestic and international investment firms such as SoftBank China and CDH Investments extending investment offers. Bolstered by this financial support, KYEE emerged from a prolonged period of dormancy and gradually embarked on a path to profitability.

In 2012, leveraging years of accumulation in mobile healthcare, KYEE achieved rapid product development and launch. Within that year alone, with mobile healthcare as its core and expanding into in-hospital medical solutions, KYEE launched 20 products and generated nearly RMB 50 million in sales. By 2015, KYEE’s market share in the in-hospital mobile nursing segment had reached 30%.

In 2016, KYEE announced a strategic transformation: upgrading from a vertical company to a platform-based enterprise, and putting medical cloud services on its agenda. At an industry conference, Li Zhi announced this decision and outlined the development trend of a new generation of medical information infrastructure centered on an integrated medical cloud. Amidst skepticism, KYEE navigated through three years.

From the perspectives of legacy investments, data sensitivity, and patient privacy protection, the ecosystem and operational models that hospitals have built over years of investment in informatization cannot be changed overnight. “At the time, there was extensive discussion, including many pessimistic voices. However, we remained firm in our judgment and put it into practice through concrete actions. If customers were not receptive, we would simply undertake further market education.”

Today, the widespread adoption and broad acceptance of medical cloud products have validated KYEE’s forward-thinking approach and foresight. The company has now successfully transitioned from the mobile health sector to become a platform-oriented enterprise with its integrated medical cloud as its core product.

In 2021, KYEE embarked on its third transformation: data platforms and services. “Issues such as how medical data should be utilized and who holds ownership remain ambiguous. As application scenarios for medical data continue to expand, some companies have gone public, seeking more comprehensive data governance solutions.” Building upon its overall medical cloud product portfolio, KYEE has established medical data as its third core business direction. Li Zhi stated, “KYEE aims to collaborate with the government in the future to develop medical IT infrastructure based on the medical cloud, open up data platforms to society, provide third-party enterprises with application scenario development support, and assist the government in effectively managing data assets.”

In 2021, KYEE built a system of “medical information infrastructure - medical data platform - third-party medical data applications” based on its medical cloud product line. Currently, KYEE provides different solutions for different service objects, including:

Why Continuous Transformation? Here Is What Li Zhi Said: The first transformation enabled KYEE to achieve initial brand accumulation; the second marked its evolution from a vertical to a horizontal company; and the third, involving the development of a medical data platform, aims to leverage KYEE’s expertise in medical cloud infrastructure to make significant strides in the medical data sector.

Why Has KYEE Been Able to Continuously Transform? This May Be Closely Tied to Its Corporate Culture. Among its workforce of 840 employees, engineers account for 700. “The team combines boundless imagination with down-to-earth pragmatism.” A strong engineering culture that emphasizes practice and execution is deeply embedded in KYEE’s organizational DNA, serving as the source of its ability to make forward-looking product strategic moves. As Li Zhi, founder of KYEE, stated, “Once we identify a clear direction, we act on it; KYEE never chases trends.”

In Li Zhi’s view, a decade in the healthcare industry is merely a basic threshold. KYEE truly began to flourish after 2012. “Before that, we were laying the groundwork, learning how to understand the industry and serve our clients, while cultivating our team’s industry acumen. Entrepreneurship is akin to leveling up by battling monsters along the way; the process of overcoming challenges is precisely what forms our core competitive barriers.”

In 2020, KYEE completed a Series D financing round of RMB 430 million, with well-known investment institutions such as Tencent and Longmen Capital joining its investor consortium.

Wang Haining, Founding Partner of Longmen Capital, remarked that in recent years, the application of big data and cloud computing in the healthcare industry has become increasingly widespread. The migration of medical data to the cloud and its interconnectivity will drive transformations in hospital management models and healthcare service delivery. Medical data will become the core asset of future healthcare.

Since 2016, KYEE has proactively developed and strategically positioned its medical cloud business, committing to building a new “cloud-based” smart healthcare ecosystem. Although the company experienced short-term growing pains, it has gained widespread recognition from medical institutions at all levels in the past two years, bringing significant opportunities for transformation and sustained growth to the healthcare informatics industry. This also reflects the management team’s in-depth thinking and forward-looking understanding of the industry.

Healthcare is by no means a simple industry. It demands unwavering patience, a deep understanding of genuine clinical needs, and, above all, meticulous humanistic care for patients. Any entrepreneur in the healthcare sector, regardless of how abundant their resources or advanced their technology may be, must rely on time to consolidate and accumulate experience. Li Zhi concluded by stating that KYEE will always uphold its belief that “KYEE’s products and services help improve people’s livelihoods,” and will persevere to the end on this long and challenging journey.

Longmen Capital is a specialized venture capital firm in the pharmaceutical industry, focusing on early-stage and growth-stage investments in pharmaceutical and biotech innovations. The team members possess interdisciplinary educational backgrounds in medicine, pharmacy, biology, and finance, along with extensive experience in pharmaceutical venture capital and industry operations. Since its establishment in 2017, Longmen Capital has invested in over 30 innovative pharmaceutical companies, with assets under management nearing RMB 3 billion.