WeDoctor Nears $350M Pre-IPO Round, Plans Hong Kong Listing Amid Business Restructuring

According to a Bloomberg report on December 16, WeDoctor, an investee of Tencent, recently completed a $350 million financing round and plans to pursue a Hong Kong listing for its digital healthcare services segment following its corporate spin-off. The spun-off entity was valued at over $6 billion prior to this latest round of financing. Citing insiders, the report stated that the company intends to file its listing application in early 2021, around the Lunar New Year. WeDoctor did not comment on the report.

Earlier this year, Citigroup, JPMorgan Chase, and CMB International (CMBI) were selected as sponsors. WeDoctor had previously received investments from Tencent, AIA Group, China Investment Corporation’s subsidiary CIC Capital, Sequoia Capital, and Morningside Venture Capital. The investors in this financing round include strategic investors and international funds.

WeDoctor’s latest fundraising round, backed by a broad base of investors, once again underscores the robust growth of the global healthcare industry and the strong market demand for WeDoctor’s digital health services.

The outbreak of the COVID-19 pandemic in 2020 propelled global healthcare demand into a period of rapid growth, presenting unprecedented development opportunities for the broader health industry. The accelerated integration of digitalization with medical services has made the healthcare sector the most prominent rising market segment, driving explosive growth in the digital health industry. According to Frost & Sullivan estimates, the size of China’s digital health market is projected to increase from over RMB 200 billion in 2019 to RMB 4 trillion by 2030.

Accelerated by the pandemic, China has actively promoted the integration of digitalization with healthcare services since the beginning of this year, introducing a series of supportive policies to foster the development of the digital health industry and ushering in structural adjustments in the healthcare market. In particular, since March of this year, relevant authorities, including the National Healthcare Security Administration and the National Health Commission, have issued policies incorporating internet-based diagnosis and treatment services into the scope of medical insurance reimbursement, thereby creating substantial new opportunities for innovation within the industry.

These factors have benefited stakeholders in the healthcare industry. WeDoctor Internet Hospital became China’s first internet hospital platform to integrate with the national medical insurance payment system, rapidly replicating and launching its model in provinces and municipalities such as Shandong and Tianjin. The large-scale procurement of digital medical services by medical insurance funds has become a key driver of the company’s business and revenue growth. Currently, WeDoctor operates 30 internet hospitals, 18 of which have been integrated with local medical insurance systems, providing residents with services including online follow-up consultations, chronic disease management, home medication delivery, and online medical insurance payments.

Public information shows that WeDoctor’s core business covers healthcare, pharmaceuticals, medical testing, and health insurance. As of October 2020, the WeDoctor platform had connected more than 7,600 hospitals and over 250,000 doctors across China, with more than 214 million real-name registered users.

Integration with the national medical insurance system has become a pivotal factor in igniting the digital health market. According to data from the National Healthcare Security Administration, basic medical insurance covered 95% of China’s total population in 2019. As the largest payer for healthcare services in China, medical insurance imposes high entry barriers and numerous technical requirements on healthcare service procurement. The breakthrough in enabling medical insurance reimbursement for internet-based diagnosis and treatment has already emerged as a core driver of the digital health market.

Driven by factors such as the pandemic and industry dynamics, the digital health market has entered an era dominated by multiple giants. Currently, the Hong Kong Stock Exchange (HKEX) is home to three major players in the digital health sector, all of which have established a leading position in the pharmaceutical e-commerce segment. In contrast, WeDoctor, as a unicorn company focused on digital healthcare services, would become the first among these four giants to concentrate on the digital healthcare services sector if it lists on the HKEX.

"Sources familiar with the matter indicated that WeDoctor's digital healthcare services business could achieve a valuation of $8–12 billion upon its public listing."