Kedu Healthcare Completes $60M Series C Funding to Expand Nationwide Service Rollout

Shanghai Kedu Healthcare Technology Co.,Ltd. Participates in Medical Equipment Exhibition File photo (Image source: International Financial News)

Recently, Shanghai Kedu Healthcare Technology Co., Ltd. (hereinafter referred to as “Kedu Healthcare Technology”) announced that it has officially completed its Series C financing round of nearly USD 60 million, with the transaction successfully closed.

It is reported that this round of financing was led by China Merchants Capital, with participation from UOB Venture Management (Singapore), Infinity Group (Israel), Huade International Financial Holdings Co., Ltd., and Mao Rong Investment. Among these, Huade International and Mao Rong Investment are existing shareholders who further increased their stakes.

It is understood that this represents the largest financing round to date in China’s medical equipment services sector. Clearly, the venture capital market is beginning to focus on the deeper segments of the broader healthcare industry, with leading companies in promising niche sectors increasingly coming into investors’ view.

Shanghai Kedu Healthcare Technology Co., Ltd. was established in 2006 as a leading high-tech enterprise in China specializing in medical equipment management services. Its service offerings encompass medical device management, departmental development management, and supply chain management. Its product portfolio covers all hospital departments, and its service network spans across China.

After more than a decade of development and construction, Kedu Healthcare Technology has cultivated a team of over 1,500 engineers, marketing and sales professionals, and operational staff. Currently, Kedu Healthcare Technology manages hospital assets worth nearly RMB 50 billion, with full-scale medical equipment trusteeship in place at more than 200 hospitals and partial trusteeship services provided to over 2,000 hospitals.

Ma Meifang, CFO of Shanghai Kedu Healthcare Technology Co., Ltd., revealed in an interview with a reporter from the International Financial News that the company’s revenue has tripled for four consecutive years, with total sales far exceeding those of other companies in the industry.

The rapid expansion of Shanghai Kedu Healthcare Technology Co., Ltd. is attributed to its pioneering “Kedu Model.”

It is understood that the "Kedu Model" is a full-lifecycle management approach for hospital medical equipment, characterized by integration, informatization, and intelligence. Distinct from traditional after-sales equipment management, this model shifts from passive repair to proactive participation in equipment maintenance, upkeep, and testing. It effectively enhances equipment utilization efficiency, transforming the previous business paradigm of "the more breakdowns, the higher the profits" into one where "the fewer breakdowns, the higher the profits," thereby aligning closely with the interests of target customers.

Ma Meifang pointed out that the “Kedu Model” was first commercialized by Kedu Medical Technology in 2015 and has been successfully implemented in more than 200 hospitals across China, establishing the company as a leader in this niche sector. Currently, this model has built brand influence among both customers and suppliers, providing favorable support in partnership negotiations and bidding processes.

Kedu Medical Technology’s unique development model and rapid scale expansion have also attracted the attention of investors.

According to Ma Meifang, multiple funds expressed strong interest in Shanghai Kedu Healthcare Technology Co., Ltd. throughout its Series C financing round. After careful consideration, the company selected China Merchants Capital, one of China’s largest state-owned enterprise groups, as the lead investor to spearhead this round. Ma told reporters that the funds raised would be primarily used for business expansion, helping to roll out Kedu’s services across China.

It is reported that Shanghai Kedu Healthcare Technology Co.,Ltd. may launch its Series C+ financing round next year. Market enthusiasm remains high, with multiple investors reportedly expressing interest in participating. Industry insiders noted that amid the current “capital winter,” Kedu Healthcare’s ability to attract investor favor and secure such a large-scale financing round underscores its strong competitiveness and reflects the capital market’s high recognition of the medical device services sector.

When asked why the company is favored by capital, Ma Meifang stated that Kedu Healthcare Technology has two major advantages in its industry development. The first is scale advantage; the company is currently the leading enterprise in the medical equipment management services industry and has formed deep stickiness with customers. The second is technological advantage; relying on more than ten years of industry experience and active independent research and development, Kedu Healthcare Technology possesses hospital-wide departmental equipment service capabilities that are rare in the industry.

Notably, in terms of technology, Shanghai Kedu Healthcare Technology Co., Ltd. is the first enterprise to introduce AR technology into the field of medical equipment services. Its independently developed smart tool for remote engineer support, "Tongying Glasses," is China’s first smart glasses specifically designed to support equipment service engineers, helping enhance expert engineers’ ability to provide frontline support. In addition, its independently developed information system for full lifecycle management of equipment, the "Archimedes" Equipment Management System, has transformed the extensive management practices of hospitals during the clinical use phase of equipment, helping target customers achieve refined management of their medical devices.

Industry insiders have pointed out that high-tech, intelligent asset management services are continuously empowering hospital management. With the advent of the 5G era, Shanghai Kedu Healthcare Technology Co., Ltd.’s robust technical reserves and strategic intelligent layout may propel it to achieve leapfrog development.

At the signing ceremony of the equity subscription agreement between Zhaorui Fund, a USD-denominated fund under China Merchants Capital, and Kedu Healthcare Technology, Guo Dehong, CEO of China Merchants Capital, stated that the investment in Kedu Healthcare Technology was driven not only by its long-term strategic layout in the healthcare sector but also by confidence in the innovation and progress it represents for the medical equipment services industry.

For investors in the healthcare industry chain, the importance of the medical equipment asset management services sector is becoming increasingly prominent. The transformation of the industry landscape driven by new service models is only just beginning, and the potential for future development is immense.

Ma Meifang told reporters that, based on incomplete statistics, the existing stock of medical equipment assets in China exceeds RMB 10 trillion and continues to grow at an astonishing rate annually, representing a market worth hundreds of billions. Over the past four years, Shanghai Kedu Healthcare Technology Co., Ltd. has tripled its revenue scale, precisely due to the high growth potential of this industry.

The aforementioned claims are well-founded. According to the "2019-2022 Big Data Report on China's Medical Device Market and Benchmark Enterprise Operation Monitoring" recently released by iiMedia Research, the scale of China's medical device market has maintained steady growth over the past five years.

Globally, the size of the global medical device market exceeded $400 billion in 2017 and reached $427.8 billion in 2018. It is projected to approach $600 billion by 2024, representing a compound annual growth rate (CAGR) of 5.6% from 2017 to 2024.

Currently, China has become the fourth-largest medical device market after the United States, Western Europe, and Japan. Data from iiMedia Research shows that the overall market size of China's medical device industry grew from RMB 255.6 billion in 2014 to RMB 530.4 billion in 2018, with an average annual growth rate of approximately 20%. Both operating revenue and net profit have maintained a rapid growth trajectory, marking a golden period for the development of the medical device industry. It is projected that by 2022, the market size of China's medical device industry will exceed RMB 900 billion.

Nevertheless, rapidly developing industries continue to present both opportunities and challenges, as is the case with the medical equipment asset management industry, which has grown alongside the medical device sector.

Ma Meifang stated that the primary challenge facing the medical equipment asset management industry remains the mismatch between technical capabilities and service demands. Medical equipment asset management is a labor-intensive, technology-intensive, and capital-intensive sector, characterized by its specialized nature and high entry barriers. Looking ahead, Shanghai Kedu Healthcare Technology Co.,Ltd. is committed to collaborating with industry peers to elevate service standards and deeply cultivate the vast medical equipment asset management market.

Source: International Financial News