Long Hill Capital: The Low-Key Healthcare Investment Powerhouse Behind $6 Billion in Fundraising

For a long time, Changling Capital remained remarkably low-profile, even bordering on mysterious.

This capital firm, which has been frequently active in the fields of innovative medical services and cutting-edge medical technologies, is led by founder Jiang Xiaodong, who rarely makes public appearances or participates in public events within the venture capital community. This has led many investors to joke with one another: “Did Changling attend your event?”

Perhaps it is precisely because of this that, whenChangling Capital Announces Oversubscribed Closing of Its Third U.S. Dollar Fund Amid Market HeadwindsOnce again, the spotlight has turned to Changling Capital.

It has drawn external attention because the fundraising approach is somewhat unusual—although the COVID-19 pandemic continues to spread worldwide,Changling Capital Exceeded Its Fundraising Target Against the Trend Through ZOOM “Cloud Fundraising”, with total funds raised exceeding $300 million.And the overall fundraising duration,From its launch last September to its completion in mid-March, it took less than six months.

In terms of the fund size under Changling Capital’s management, over a period of four and a half years, it successfully raised three USD-denominated funds and one RMB-denominated fund, with total capital commitments reaching RMB 6 billion. Looking back to the early days of Changling Capital, its inaugural USD fund, which it raised and managed, stood at USD 125 million; over four years, its assets under management (AUM) grew sevenfold.

The ability to raise excess funds against the trend during the winter of 2020, when COVID-19 was ravaging the globe, is closely tied to Changling Capital’s prowess in screening projects. On June 29 last year, Changling Capital welcomed its first IPO company in the four years since its establishment—Hygeia Healthcare Holdings Co., Ltd. (hereinafter referred to as “Hygeia Healthcare”)—which officially listed on the Main Board of the Hong Kong Stock Exchange. AndJiang Xiaodong, Founding Partner of Changling Capital, is the exclusive Series A investor in Hygeia Healthcare.

Changling Capital’s subsequent investment in Hygeia Healthcare yielded substantial returns: as of January 31, 2021, Hygeia Healthcare’s cumulative stock price increase reached 324%. Consequently, Hygeia Healthcare ranked among the top five Chinese publicly listed healthcare service providers by market capitalization. According to reliable industry sources,Changling Capital expects at least two healthcare services and technology companies to go public via IPO this year.It remains to be seen whether it can replicate Hygeia Healthcare’s market performance following its IPO, which has generated a certain degree of anticipation.

Changling Capital has always maintained a low-profile approach. There is little external reporting on Changling Capital’s funds themselves. Most coverage of Changling Capital tends to draw from materials such as tracing founder Jiang Xiaodong’s prior tenure at NEA (New Enterprise Associates). However, these reports often overlook how Jiang Xiaodong’s experience at NEA influenced Changling Capital’s subsequent investment strategies. In reality, this period was far more significant.

When mentioning Changling Capital, it is impossible not to mention NEA (known in China as Enyi Investment), one of the largest venture capital firms in the United States. This experience is considered particularly significant because Jiang Xiaodong, the founder of Changling Capital, previously led NEA’s investment operations in China for 11 years. NEA is virtually a household name in the venture capital community, both in the United States and overseas.As one of the oldest and largest venture capital firms in U.S. history by assets under management, NEA manages over $20 billion in capital.

NEA’s investment portfolio is heavily weighted toward healthcare, which accounts for half of its total investments. It has consistently ranked among the top U.S. venture capital firms with a long-term focus on the healthcare sector. To illustrate the depth of NEA’s ties to healthcare, consider the following example:Former U.S. FDA Commissioner Scott Gottlieb served as a partner at NEA for 10 years, and after leaving the FDA in 2019, he returned to NEA.

Jiang Xiaodong, Founding Partner of Changling Capital, almost single-handedly built NEA’s investment team in China. He joined NEA in 2005 and was tasked with returning to China as a Global Partner and Managing Director for China. Over the course of 11 years, Jiang Xiaodong was solely responsible for NEA’s investments in China.At that time, he led NEA in investing in nearly 30 Chinese companies, with a focus on the IT and healthcare sectors, and many of the companies he spearheaded have successfully gone public.According to the latest news, Tuya Smart, in which NEA China invested in 2015, recently listed on the New York Stock Exchange. As of April 8, its market capitalization was approximately $11.8 billion.

AndJiang Xiaodong’s team’s interest in China’s healthcare services industry dates back to 2008, when he made early-stage investments in CITIC Pharmaceutical, WeDoctor Group, and Hygeia Healthcare over the course of three years.Among these, CITIC Pharmaceutical was acquired by Shanghai Pharmaceuticals Group for RMB 4 billion in 2011, becoming one of the largest mergers and acquisitions in the history of China’s pharmaceutical industry up to that year. As a super unicorn in the digital healthcare sector, NEA successfully exited its investment in WeDoctor Group in late 2015 through a secondary share transfer. It is reported that WeDoctor Group and CITIC Pharmaceutical alone generated over RMB 1 billion in investment returns for NEA.

Hygeia Healthcare is also an investment project worth noting.1Ten years ago, at the inception of Hygeia, Jiang Xiaodong represented NEA in making an exclusive Series A investment in the company. Subsequently, Changling Capital made two significant investments in Hygeia Medical in 2017 and 2019, respectively.Six months after its successful IPO in 2020, Hygeia Healthcare not only ranked among the top five Chinese listed healthcare service providers by market capitalization, but also achieved the best post-IPO stock performance among all Chinese pharmaceutical companies that went public in Hong Kong in 2020. This has also delivered substantial returns to Changling Capital.

Although Jiang Xiaodong left NEA China to found Changling Capital and devote himself to the broader healthcare sector, the connection between Changling Capital and NEA did not end there.NEA remains a significant limited partner (LP) of Changling Capital, providing it with a global perspective and high-quality strategic cooperation resources. Scott Sandell, Managing Partner at NEA, has also become a long-term strategic advisor to Changling Capital.

According to the “2020 Global Healthcare Industry Capital Report” by VCBeat and Eggshell Institute, global biopharmaceutical financing topped the list in 2020, surpassing the combined totals for digital health and medical devices. Throughout 2020, there were 786 transactions in the global biopharmaceutical sector, with a total transaction value of $36.9 billion (approximately RMB 254.7 billion). The biopharmaceutical sector has become exceptionally hot, attracting a significant influx of capital as investors seek to capture a share of the market.

However, Changling Capital, which has focused on investment themes in big health and aging since its inception in 2016, did not pivot to invest in the biomedical sector simply because of its popularity, but instead choseCommit fully to the tracks of innovative medical services and innovative medical technology.This can be said to be unique among numerous healthcare investment funds.

Over the past four years, Changling Capital has cumulatively invested in more than 50 healthcare projects. Moreover, its annual investment amount in this sector has reached nearly RMB 1 billion.Changling Capital’s continued deep dive into selected sectors, along with its increasing investments, also reveals its steadfast commitment and determination in the fields of innovative medical services and innovative medical technologies.

Even in 2020, when the pandemic was raging, Changling Capital did not slow down its investment pace. According to statistics, Changling Capital completed 25 early-stage and growth-stage investments in 2020, with a total investment amount exceeding RMB 900 million.Portfolio companies of Changling Capital also tend to secure subsequent rounds of financing smoothly—in 2020, more than 16 companies completed follow-on funding, with the total amount raised exceeding RMB 4.4 billion.

Although Changling Capital maintains a low profile, its investments in innovative healthcare services and medical technologies have, in fact, demonstrated a steady and pragmatic approach. It can be said thatChangling Capital, established just over four years ago, is one of the most active funds in this sector.

Although Changling Capital has not fully disclosed the list of more than 50 companies in which it has invested, based on VCBeat’s public reports on past portfolio companies, we can still capture a key piece of information—Changling Capital is an early-stage investor behind leading companies in multiple niche industries.

In the Field of Innovative Medical Services, Changling Capital invested in Hygeia Medical, a leading oncology healthcare group in China, and Gushengtang TCM (exclusive Series A), the largest digital chain platform for new Traditional Chinese Medicine services in China. It also led the investments in Yizhi (Series A), a vertical specialist in the medical aesthetics sector; Dongfang Qiyin (Series B), dedicated to rehabilitation for children with autism; and U-Fu Clinics (Series B), a chain of medical institutions focused on sports medicine, musculoskeletal rehabilitation, and the diagnosis and treatment of orthopedic conditions.

In Innovative Medical Technology, including its exclusive Series A investment in the AI and medical big data unicorn LinkDoc Technology; its lead Series A investment in StoneWise, an AI-driven drug discovery tech company; its exclusive Series B investment in YunKai YaMei, an internet-based multi-specialty hospital group focused on rare chronic diseases; its exclusive Series A investment in “ZhiYun YiLu,” a company specializing in digital pharmaceutical marketing; its exclusive Series A investment in AiYi ChuanDi, a cross-border healthcare service platform between China and the United States; and its exclusive Series A investment in JianDan XinLi, an online psychological counseling service platform.

The portfolio companies collectively form Changling Capital’s investment landscape, from which it can be seen that,The projects they invest in are relatively early-stage.One distinctive feature of its investment portfolio may be that,Innovative enterprises, in addressing challenges within niche sectors, have themselves turned their problem-solving approaches into viable businesses.This may draw reference from Hygeia Healthcare, Gushengtang TCM, and similar Changling-affiliated enterprises.

In fact, due to its long-standing low-profile approach, Changling Capital rarely discloses information about itself to the outside world. It is actually difficult for external observers to piece together Changling Capital’s investment layout based on fragmented data. The curiosity surrounding Changling Capital has also prompted the firm to share its thoughts on strategic investment planning with the public.

It is reported that,On April 17, 2021, Jiang Xiaodong, Managing Partner of Changling Capital, will be invited to attend the 5th Future Healthcare 100 Conference and deliver a keynote speech.At that time, he will systematically introduce Changling Capital’s investment strategies and layout in the fields of innovative medical services and technology for the first time since the firm’s establishment four years ago. VCBeat will provide continuous coverage throughout the event.