Xiyou Health Secures Tens of Millions of RMB in Series A Funding to Expand Medical Device New Retail Business

VCBeat (WeChat ID: vcbeat) learned at the earliest opportunity that on July 23, a new retail medical device company founded by Mr. Kang Kai, former Director of Alibaba Health and General Manager of Tmall Medical Health,“Grapefruit Health”Announced the completion of a tens-of-millions RMB Series A financing round from Volcanics Venture and Yunion Healthcare Ventures, with existing shareholder For Future Capital making additional follow-on investments. RCCAPITAL served as the exclusive financial advisor for Xiyou Health’s current financing round.

Founded in 2019, Grapefruit Health is a new retail company specializing in medical devices. It leverages medical devices as its entry point and focuses on boosting performance for brick-and-mortar pharmacies and creating new retail scenarios, thereby capitalizing on the dual growth opportunities of the expanding medical device market and increased traffic driven by the separation of prescribing from dispensing. Grapefruit Health has assembled a team of core professionals from China’s pharmaceutical retail and medical device sectors, including talent from Alibaba’s B2B “Iron Army,” Kangfu Zhijia (Rehabilitation Home), Tmall Pharmacy, and AliHealth. By effectively combining Alibaba-style execution capabilities with deep resources in the healthcare industry, the company has achieved rapid business growth.

Founder and CEO of Xiyou Health: Kang Kai

Kang Kai (alias: Yu Tian), Founder and CEO of Xiyou Health, is a prominent figure in China’s pharmaceutical e-commerce industry. In 2004, Kang Kai founded Jinxiang.com, China’s first B2C pharmaceutical e-commerce website. In 2009, he served as Vice President of Yihaodian, where he established No.1 Pharmacy and Yihaodian Drugstore (NASDAQ: YI), serving as the latter’s inaugural CEO. In 2014, he joined Alibaba as General Manager of Tmall Medicine & Health. During his tenure, he increased the annual GMV of Tmall Medicine & Health from billions to RMB 40 billion, capturing over 70% of China’s pharmaceutical e-commerce market share. Since 2015, he has also served as a Director of Ali Health (HKSE: 00241), where he pioneered businesses including self-operated retail, international operations, B2B, and new retail; his team’s performance accounted for 90% of Ali Health’s total listed company results. In 2018, he joined Kangfu Zhijia Group as Partner and CEO. In 2019, he founded Xiyou Health.

Regarding Grapefruit Health, Kang Kai stated, “In the past two years, major pharmacy chains have engaged in extensive acquisitions across China to expand their market presence. Now, they must shift their focus toward deepening operational excellence. The medical device sector has achieved breakthrough development in recent years, with significant advancements in both technology and capacity that are incomparable to the past. Driven by market shifts resulting from evolving social trends and consumer concepts, medical devices are poised to become a new key growth engine for brick-and-mortar pharmacies in the future. Grapefruit Health is dedicated to the new retail development of medical devices. Through nationwide implementation and expansion, we have established a comprehensive system encompassing frontline training, improvements in sales per square meter and labor productivity, integration of supply chain and channel resources, and user health solutions. This system has directly driven substantial increases in the retail performance of our partner pharmacies.”

Liu Kai, Managing Director of Volcanics Venture, stated, “The pharmaceutical industry is undergoing significant structural adjustments, and major changes bring substantial opportunities. Amidst this transformation, Xiyu Health is leveraging a new retail model to provide better services to patients and create greater value for its partners. Volcanics Venture is optimistic about Xiyu Health’s development direction and has confidence in the team’s industry insights and operational capabilities. Volcanics Venture continues to seek new opportunities arising from the transformation of the healthcare industry.”

Wang Ruolin, Executive Director of Yunion Healthcare Ventures, stated, “The offline retail channels for medical devices cannot be overlooked. With the accelerating aging of society and evolving consumer mindsets, market potential will continue to be unlocked. We believe that Grapefruit Health’s new retail philosophy and its win-win model with partners will enable the rapid establishment of a national professional channel brand. As a specialized venture capital fund deeply rooted in the healthcare sector, Yunion Healthcare is pleased to collaborate with the Grapefruit Health team to deliver superior health service experiences to users.”

Zhao Yang, Partner at For Future Capital, stated, “Medical device sales account for only 4.85% of Chinese pharmacy revenues, whereas this figure approaches 50% in mature markets such as Europe and the United States. This indicates a tenfold growth potential for medical device sales within China’s pharmacy sector. Just as Watsons, Miniso, and MUJI have emerged as dominant players in the daily chemical and fast-moving consumer goods (FMCG) markets, the fragmented product categories, high gross margins, and strong demand characteristic of the medical device market will inevitably give rise to channel brands in niche segments. For Future Capital favors teams with robust supply chain management capabilities and a profound understanding of new retail; our follow-on investment in Xiyou Health is based on this investment thesis. Since the previous round of financing, Xiyou has maintained rapid growth despite the challenges posed by the pandemic, fully validating the team’s decision-making and execution capabilities. Moving forward, For Future Capital will provide support across multiple dimensions—including supply chain optimization, traffic acquisition, and commercial insurance—to accelerate Xiyou Health’s development.”

As the exclusive financial advisor for Grapefruit Health’s current financing round, Zhu Xin, Vice President of RCCAPITAL, stated, “I have known Yu Tian for many years, and we share numerous mutual friends in the pharmaceutical e-commerce industry. Yu Tian previously served as General Manager of Tmall Medicine & Health, a position that effectively functions as a hub for industry-wide information and resources. We are confident in Yu Tian’s industry expertise and entrepreneurial drive, and we are delighted to have facilitated the collaboration between Grapefruit Health and prominent investment institutions during this financing round. We remain committed to supporting Grapefruit Health over the long term.”