Qinovomedical Secures Tens of Millions in Series A Funding Led by Hefei Industrial Investment Promotion Fund to Advance ENT Medical Device Portfolio

Recently, Jiangsu Qihao Medical Technology Co., Ltd. (hereinafter referred to as "BREATH MEDICAL") announced the completion of its Series A financing round, amounting to tens of millions of yuan.Led by Hefei Industrial Investment and Promotion Venture Capital Fund, with follow-on investments from Hefei Angel Investment Fund, Anhui Huaying Smart IoT Fund, and others。

Following this round of financing, Hefei BREATH MEDICAL Technology Co., Ltd. was officially established as the company’s global headquarters for future development. The company will construct a new 1,000-square-meter Class 10,000 cleanroom production facility in Hefei to manufacture finalized products that have completed pilot-scale trials, including sinus balloon catheters and biodegradable (expandable) hemostatic cotton.

BREATH MEDICAL is a medical device company founded in 2017, focusing on the niche sector of otolaryngology. After three years of design, research and development, testing, and production, it has obtained1 Class II Certified Product, and has been sold nationwide;2 Class III Medical Devices(Low-temperature plasma surgical system, fully bioresorbable sinus drug-eluting stent system) are undergoing clinical trials at seven hospitals in China, with the trials currently progressing smoothly.

It has been over a year since BREATH MEDICAL completed its Pre-A financing round in 2019. What changes and upgrades has the company undergone during this period? VCBeat (WeChat ID: vcbeat) conducted an exclusive interview with Dr. Pang Yonggang, founder of BREATH MEDICAL, whose insights reveal the company’s progress and achievements over the past year.

“Our most significant changes have been in product R&D,” Dr. Pang Yonggang told VCBeat. “First, we have further upgraded both the degradation time and the drug-eluting duration of our fully bioresorbable sinus drug-eluting stents, achieving precise degradation and controlled release. Second, our new product, a bioresorbable (expandable) hemostatic sponge, has completed pilot-scale production after more than a year of laboratory synthesis and is now transitioning to full-scale manufacturing.”

This biodegradable (expansile) hemostatic sponge was developed by the R&D team of BREATH MEDICAL after three years of persistent technological breakthroughs.China's First Biodegradable Hemostatic Cotton for Otorhinolaryngology, has completed development and is scheduled for production at the Hefei plant.

Biodegradable (Expandable) Hemostatic Cotton (Sample Image)

It is worth mentioning that,Currently, there are no biodegradable hemostatic cotton products for otorhinolaryngeal bleeding available in China., due to the special location (cavities) of bleeding in the ear, nose, and throat, it is difficult to achieve hemostasis through methods such as suturing; instead, hemostatic materials must be used to pack and seal the area. Currently, only one medical device company in the United States has developed a type of absorbable hemostatic sponge capable of achieving hemostasis in the ear, nose, and throat, which has established a global monopoly through its worldwide exports.

According to Dr. Pang Yonggang, the biodegradable (expandable) hemostatic sponge independently developed by BREATH MEDICAL has demonstrated superior performance over imported products in trials, holding promise to break the import monopoly, achieve domestic substitution, and benefit patients. Founder Pang Yonggang further emphasized, “Amidst the changing international landscape, I deeply feel that without breakthroughs in polymer materials, it will be difficult for us to compete with Europe and the United States in the medical device sector.”

Currently, this hemostatic cotton has enteredExpedited Approval Channel, belonging toClass III Medical Device, we are confident that BREATH MEDICAL will soon announce another piece of good news.

BREATH MEDICAL's ENT department layout also includesLow-Temperature Plasma Surgical System、Fully Bioabsorbable Sinus Drug-Eluting StentandSinus Balloon. The sinus balloon catheter has completed its R&D phase, and pilot production will commence upon the completion of the new Hefei factory. Under the guidance of renowned domestic otolaryngology experts from Peking University People’s Hospital, Shanghai Sixth People’s Hospital, and The First Affiliated Hospital of Sun Yat-sen University in Guangzhou, BREATH MEDICAL has launched the R&D of its next four new otolaryngology products. The technological innovations and breakthroughs of these new products have been endorsed by the company’s Chief Scientist—Deputy Director Zhou Feng, Lanzhou Institute of Chemical Physics, Chinese Academy of SciencesWith strong support and assistance, the company has jointly established with the Lanzhou Institute of Chemical PhysicsJoint Laboratory of Biomedical Materials, BREATH MEDICAL and CAS。

Unlike medical companies that focus on the R&D and production of a single device, BREATH MEDICAL has established a comprehensive presence in otolaryngology. In addition to the four core products mentioned above, the company maintains several undisclosed backup pipelines. Pang Yonggang, the founder, candidly stated, “Although managing multiple pipelines makes early-stage R&D more challenging, a diverse product portfolio will enable BREATH MEDICAL to generate ‘synergy’ in future technology promotion, physician education, and conference support. This will facilitate our sales efforts while enhancing the company’s risk resilience.”

BREATH MEDICAL’s precise product portfolio strategy is attributable to the industry expertise accumulated by its founder, Dr. Pang Yonggang, over more than two decades of deep involvement in the medical device sector. Dr. Pang not only served as a clinician for seven years but also worked in medical device sales for several years. This comprehensive experience in the medical device industry has given him a thorough understanding of the unmet needs in clinical otolaryngology, enabling the company to align its product development accordingly and truly deliver benefits to the public.

Regarding the investment in BREATH MEDICAL,Lead Investor in This Round: Hefei Investment Promotion FundStatement: Healthcare is one of the key industries prioritized for development in Hefei. The Hefei Investment Promotion Fund has invested in and supported BREATH MEDICAL, primarily due to the promising prospects of its focused portfolio of otolaryngology medical devices.Market, demonstrating strong growth potential and favorable development prospects; secondly, there is recognition of its technologyTeamits sustained R&D capabilities and innovation; third, to see its fullProductThe product line has matured, and the product portfolio system is well-established; fourthly, there is trust in Dr. Feng and his team’s deep expertise within the industryAccumulation. Through a combined investment via its investment promotion fund and angel fund, Hefei Industrial Investment Group will guide BREATH MEDICAL to accelerate its development and provide the company with sustained support in the future.

Liu Qin of the Hefei Angel Investment FundHe stated, “The Hefei Angel Fund has always been dedicated to supporting early-stage technology enterprises in Hefei. Medical and general health is a key area of focus for the city in recent years. BREATH MEDICAL possesses strong technical capabilities in the field of otolaryngology, with a team deeply rooted in the medical industry for many years. Its product portfolio covers a wide range of devices in otolaryngology, and its business model is clear and viable. The project aligns with the investment criteria of the Hefei Angel Fund. Furthermore, the establishment of BREATH MEDICAL in Hefei will help promote the development of the city’s medical industry. In the future, our company will provide more comprehensive post-investment management services in areas such as government resource coordination, project application, and financing.”

Liang Qining of Huaying Investmentstated: “Huaying Investment focuses on opportunities in the domestic substitution of scarce medical resources and healthcare informatization. Our investment in BREATH MEDICAL is driven by two main factors. First, we recognize the vast patient population with ENT (ear, nose, and throat) conditions in China, with over 20 million new cases annually, while the domestic ENT industry development remains relatively lagging. Second, BREATH MEDICAL specializes in developing a comprehensive suite of products for ENT departments. Its product designs are practical, address critical market pain points, and demonstrate excellent clinical outcomes. After thorough due diligence, we consider BREATH MEDICAL a highly scarce and valuable investment target. In the long term, we strongly align with Dr. Pang’s team’s product pipeline strategy. Through continued exploration and R&D, BREATH MEDICAL is poised to introduce more innovative products in the ENT field, providing holistic solutions to alleviate patients’ suffering.”

Hefei Industrial Investment Holding (Group) Co., Ltd. was established in March 2015 through the merger of Hefei State-owned Assets Holding Co., Ltd. and Hefei Industrial Investment Holding Co., Ltd. As one of the three major platform companies under the supervision of the Hefei Municipal State-owned Assets Supervision and Administration Commission, the Group is positioned as a state-owned capital operating company focused on industrial investment and financing as well as innovation promotion. The Group has a registered capital of RMB 15.08 billion, with a domestic issuer credit rating of AAA and an international credit rating of BBB. It owns 23 wholly-owned subsidiaries, holds controlling stakes in 4 companies, and has equity interests in 20 companies. Its core business spans four major segments: industrial platforms, innovation platforms, open cooperation platforms, and capital platforms.

As a state-owned capital operation platform in Hefei, Hefei Industrial Investment Group adheres to the development strategy of “integrating industry with finance.” Leveraging its subsidiaries, including Hefei Industrial Investment Capital Management Co., Ltd. and Hefei Innovation Technology Venture Capital Co., Ltd., as primary vehicles, the group manages and operates funds such as the Hefei Venture Capital Guidance Fund, the Hefei Angel Investment Fund, and the Hefei Science and Technology Innovation Fund, thereby establishing an equity investment fund system that covers the entire lifecycle of enterprises.

As of the end of November 2020, the total scale of funds under the “Industrial Investment Group” exceeded RMB 66 billion, cumulatively supporting more than 300 enterprises and facilitating the successful listing of 29 companies on capital markets, thereby providing robust support for industrial development.

Hefei Investment Promotion Fund is one of the self-managed funds under the Industrial Investment Group, with a total scale of RMB 5 billion. Established to support the development of emerging industries in Hefei, the fund is positioned to facilitate the landing of high-quality key industrial projects, accelerate industrial clustering, and promote industrial upgrading. It fully leverages its guiding role in investment attraction and industrial leadership, prioritizing support for technology-driven enterprises that are industry leaders, possess technological advantages, have stable teams, and operate in mature markets, encouraging them to establish their presence in Hefei.

As an industrial investment fund, the Fund was established in 2014 with fiscal appropriations from the Hefei Municipal Government and is managed by Hefei Innovation Technology Venture Capital Co., Ltd., a subsidiary of the Industrial Investment Group. By actively playing a leading and demonstrative role and focusing on early-stage investments, the firm has vigorously supported the development of early-stage technology-based startups in Hefei, facilitating the transformation of government funds from direct grants to equity investments and from mere capital allocations to structured fund operations. As of the end of November 2020, the total size of the Hefei Angel Fund reached RMB 624 million. A total of 140 projects were approved, with a total approved amount of RMB 743 million; 120 projects were actually invested in, with a total investment amount of RMB 601.25 million. Nine county/district-level sub-funds were initiated and established, with a combined total size of RMB 472.1 million. An angel fund cluster characterized by “citywide coverage, deep penetration into counties and districts, and expansion beyond Hefei” has been established, making it the largest direct-investment government fund in Anhui Province in terms of scale, number of investments, and total investment amount.

Huaying Investment, established in April 2016, is a venture capital firm dedicated to the healthcare and technological innovation sectors. Its management team brings extensive experience in deep tech, the internet, and the health industry. Adhering consistently to the strategy of “thinking like entrepreneurs,” Huaying Investment provides founders with comprehensive, supportive services across industry resources, product development, and technology.

Huaying Investment currently manages two funds, with assets under management totaling nearly RMB 700 million. Its investment focus spans digital and tech-driven healthcare, sports and wellness, and IoT product technologies, with a particular emphasis on technological advancements and breakthrough innovations in the medical field. As of the third quarter of 2020, it had completed investments in more than 40 early- to mid-stage startups.