Zhibei Medical Secures Tens of Millions in RMB Financing Led by Iridium Capital Amid Three Consecutive Years of Funding

Over the past two years, the capital environment has been relatively cautious; however, the healthcare sector, as an essential industry, has maintained steady growth. Leading companies with strong operational performance have attracted significant investor attention.

VCBeat (WeChat ID: vcbeat) has learned that Zhibei Pediatrics (now upgraded to “Zhibei Medical,” hereinafter referred to as Zhibei Medical) announced it recently secured a new round of financing amounting to tens of millions of yuan. This round was led by Y Capital, which focuses on investing in niche vertical sectors within the healthcare industry.

This round of financing coincides with the brand transition from ZhiBei Pediatrics to ZhiBei Medical. The rationale and changes behind this brand upgrade are as follows: growing user demand, accumulated expertise in specialty development, and a more clearly defined strategic direction.

Zhibei Medical was established in September 2016. The company is committed to providing closed-loop, evidence-based medical services by integrating offline physical clinics with online internet platforms. A review of Zhibei Medical’s financing history shows that in May 2017, it announced securing tens of millions of RMB in Series A funding from Sequoia Capital China. In October 2018, the company completed its Series A+ round, raising tens of millions of RMB, led by Y Capital.

Regarding the new round of financing, Fang Fang, Investment Partner at Y Capital, stated: “Zhibei has always prioritized medical safety and service quality as its foundation, attracting a group of outstanding doctors, nurses, and management professionals who share this common vision, while maintaining a highly stable team. Furthermore, Zhibei places significant emphasis on its standardization and training systems, which provide distinct advantages in horizontal regional replication and vertical specialty development, constituting one of the core competencies of its outpatient clinic chain.”

What has enabled Zhibei Medical to repeatedly attract investor favor? What are the logic and strategic approach behind its brand upgrade? Using Zhibei Medical as a case study, how can new development models for clinics be identified? To address these questions, VCBeat conducted an exclusive interview with Zhao Qiang, CEO of Zhibei Medical.

The reporter learned that Zhibei Medical currently operates a total of four clinics. In June 2017, Zhibei’s first pediatric clinic opened in Panyu, Guangzhou; in May 2018, the Tianhe Clinic opened; in December of the same year, the Futian Clinic in Shenzhen opened; and in January 2019, the Kunming Clinic in Yunnan Province opened.

For over two years, Zhibei has operated as a pediatrics-centered, multidisciplinary healthcare institution. However, as its scope of business continues to expand, Zhibei’s users have been raising new demands, leading to the continuous launch of an increasing array of service offerings.

“Initially, Zhibei focused on pediatric internal medicine, preventive care, and dermatology. Under the current medical management system, dermatology is classified as a primary department, serving both children and adults without distinction. Before the opening of our second clinic, Zhibei added otolaryngology and stomatology, which are also primary departments serving patients of all ages. Our customer survey revealed that adult users account for more than 20% of our clientele, most of whom initially built trust with Zhibei through pediatric services. Driven by this trust, patients expressed a desire for a broader range of specialties. In response, Zhibei refined its service positioning to focus on pediatric care while simultaneously serving the entire family.”

In July 2019, Zhibei Pediatrics was officially upgraded to Zhibei Medical. “Throughout the brand restructuring, our unwavering commitment—and one further reinforced through practice—remains our dedication to medical quality. With the consensus of the management team, we have adopted ‘pioneering standardized medical care and making reliable healthcare more accessible’ as our service vision for this new phase,” stated Zhao Qiang.

Following the upgrade of ZhiBei Pediatrics to ZhiBei Medical, both offline and online services will be enhanced, with an expanded scope of services, a broader patient base, and an improved service experience. The specific changes are as follows:

First, the upgrade of multi-disease diagnosis and treatment services in pediatrics. After a period of exploration and learning, Zhibei has gradually expanded its pediatric diagnosis and treatment services for multiple conditions.

In addition to the existing departments of General Pediatrics and Child Health Care, specialized diagnostic and treatment services for chronic pediatric conditions have been added, including clinics for Pediatric Wheezing, Pediatric Height Management, Pediatric Rhinitis/Sinusitis Management, Day Treatment for Neonatal Jaundice, Screening for Pediatric Hip Abnormalities, Pediatric Immunization Planning, Pediatric Behavioral Development, and Pediatric Optometry and Vision Care.

Second, upgrading adult diagnostic and treatment services. To enable parents to access evidence-based and reliable medical care just as children do, Zhibei Dental and Dermatology will continue to expand and deepen their existing aesthetic service capabilities.

Zhibei Dermatology has expanded its services to include photoelectric and injectable medical aesthetics, and will place greater emphasis on long-term follow-up management for chronic diseases in the future, aiming to serve as a robust complement to the service limitations of public hospitals.

In addition to its existing pediatric preventive dental care services (oral health consultations, fluoride varnish application, and pit and fissure sealants), ZhiBei Dental has developed a clearer business plan for its pediatric dental treatment services. The services currently offered by ZhiBei include: frenuloplasty, 3M resin restorations for primary teeth, root canal therapy for primary teeth, crown restoration for primary teeth, simple extraction of primary teeth, extraction of impacted and unerupted teeth, treatment of dental trauma, and early orthodontic intervention for children.

Third, specialty upgrades for the online clinic. The Zhibei Online Clinic currently has over 200 medical professionals, providing online consultation services across 30 specialties.

Professional services cover pediatric departments (Pediatric Internal Medicine, Pediatric Surgery, Child Health Care, Pediatric Respiratory Medicine, Neonatology, Pediatric Neurology, Pediatric Endocrinology, Pediatric Infectious Diseases, Pediatric Anesthesiology, Pediatric Gastroenterology, and Child Psychology), as well as Ophthalmology, Obstetrics and Gynecology, Laboratory Consultation, Rheumatology and Immunology, Wound Repair and Burn Plastic Surgery, General Surgery, Optometry, Genetics, Colorectal Surgery, Radiology, Psychiatry, and Hematology and Oncology Consultation.

In addition to general pediatric patients, the service scope has been expanded to cover individuals preparing for pregnancy, pregnant and postpartum women, and the general adult population.

Fourth, upgrading the health knowledge service system. In the fields of pediatrics and general health, individuals can acquire disease-related knowledge and enhance their health experiences through family education. Therefore, Zhibei has been committed to reducing the cost for children and parents to access reliable medical knowledge through family education, with the aim of alleviating pressure on the healthcare system.

In the past, Zhibei aimed to help parents easily access professional and reliable doctors through free health education, paid communities, paid courses, and one-on-one medical consultation platforms. At the same time, doctors could earn decent incomes and gain patients’ respect via the platform system established by Zhibei.

Following the upgrade of Zhibei Medical, the Zhibei Health Knowledge Service Platform will undergo comprehensive service enhancements, featuring deeper integration of platform services, smoother user experiences, a more coherent knowledge framework, and more convenient access to information.

Regarding the external concerns about low pediatric consultation fees and the strategic rationale for introducing high-ticket items, Zhao Qiang offered his perspective: “From a profitability standpoint, pediatrics does not rely on pharmaceuticals or diagnostic tests, resulting in relatively lower profit margins. However, pediatric care is an essential service and serves as a strong driver of patient traffic. Building on Zhibei’s evidence-based medicine framework, serving children and their families follows a logical and seamless approach, with the primary aim being to meet the diverse needs of patients.”

If clinics on the market are broadly categorized, they can generally be examined from two perspectives:

The first category comprises offline outpatient clinics with or without "Internet DNA," such as DXY Clinic, Yuxueyuan, Zhibei Medical, and Mommy Knows Best. These pediatric clinics are equipped with internet operations teams and provide online medical services. In contrast, other clinics like Tian’ai Pediatrics and Ruibao Pediatrics place greater emphasis on the operation of their physical brick-and-mortar facilities.

The second classification is based on medical philosophies, namely evidence-based (modern) medicine and traditional medicine. Zhibei’s operational and management model adopts a dual-track approach, integrating online and offline services to deliver closed-loop evidence-based medical care.

“Our online advantage lies in enabling patients to manage their health through various service formats, including online consultations, community-based health management, and educational courses. We provide education on basic nursing care, empowering patients with the skills to handle such care when facing illness. In reality, when patients fall ill, anxiety often drives them to queue up at public hospitals, yet 70% of conditions can be resolved online. ZhiBei not only delivers comprehensive online services effectively but also avoids incurring substantial management and labor costs. Our steadfast commitment to evidence-based medicine is another key strength of ZhiBei Healthcare. Increasingly, parents trust scientific medical advice grounded in evidence, and our persistence in this area has earned widespread recognition from many parents.”

Currently, Zhibei has partnered with both DXY and Dedao to upgrade its health knowledge service system. As for the offline segment, the significant adjustments to Zhibei’s offline landscape following this round of financing can be summarized as three “news”: new cities covered, new departments expanded, and new cooperation models.

First, newly covered cities. Outpatient clinics are being established in locations with a certain base of online users, such as Foshan and Nanning, with future expansion focusing on South and Southwest China.

Second, expansion into new departments. The upgrade of Zhibei Medical signifies a clearer scope of services for Zhibei: children and their core families. Therefore, Zhibei will pilot the expansion of optometry and vision care centers, as well as medical aesthetics services (including cosmetic procedures and related dental services) in selected cities.

Third, new models of collaboration. Partnering with the insurance industry is also a direction that Zhibei Future is willing to explore. Zhibei aims to serve corporate clients and other high-end commercial insurance policyholders through the insurance sector.

Zhao Qiang stated, “Zhibei will continue to invest in its online presence. The internet serves not only as a traditional channel for acquiring customers but also as the delivery platform for Zhibei’s asset-light service model. Services such as offline appointment scheduling and customer support, free health education content, and online health management will be integrated through our digital platforms.”

Fang Fang, Investment Partner at Irongate Capital, stated, “In fact, investors dynamically monitor the performance of portfolio companies throughout the pre-investment, investment, and post-investment phases to inform decisions on whether to invest or provide additional support. Over the past year or so of our collaboration, Zhibei has opened new clinics in Shenzhen and Kunming, successfully taking its first step in cross-regional expansion. In addition to its existing departments—pediatrics, child healthcare, and dermatology—it has launched specialized services including otolaryngology, orthodontics, an asthma clinic, and medical aesthetics, thereby enriching its service offerings for children and families. Both monthly patient visits and monthly revenue have achieved multi-fold growth, while the follow-up visit rate has also risen significantly, demonstrating that Zhibei has earned greater recognition from patients.”

In June 2019, ten government departments jointly issued a document to promote the sustained, healthy, and standardized development of privately run medical institutions, reiterating the pilot program for clinic filing management. Regarding the challenges in establishing clinics, Zhao Qiang revealed that since 2017, policies have been gradually relaxed and are no longer the primary constraint. The key factors most limiting the progress of clinic establishment are mainly physicians, property resources, patient base, and control over medical quality.

Zhao Qiang cited the Kunming clinic as an example to explain the rationale behind establishing new clinics in different regions: “Prior to launching the Kunming clinic, we already had physicians who had been collaborating with Zhibei for an extended period through our online platform, so there was no shortage of medical resources. Meanwhile, through patient education and health management services on our online platform, we had accumulated a substantial base of loyal followers. As a result, the launch of the Kunming clinic proceeded very smoothly, achieving profitability within just three months. Going forward, the expansion into the Foshan and Nanning markets will follow the same strategy.”

In the interview, Zhao Qiang particularly emphasized Zhibei’s stringent control over medical quality. “Quality management is a critical factor constraining geographic replication and expansion. Zhibei has established distinctive standard operating procedures (SOPs) and clinical pathways, encompassing physician clinical pathways, nursing training, onboarding assessments for medical staff, patient service workflows, and standardization of medical service products. This area represents Zhibei’s most significant investment to date, as well as its greatest return. All physicians at each clinic undergo three months of training at headquarters. These meticulous measures reflect Zhibei’s commitment to building a rigorous quality control system.”

The trend toward specialization in clinics is evident. The path to differentiated competition for clinics lies not in tackling the complex and rare cases handled by public hospitals, but in focusing on high-frequency specialties that meet clinical patients’ needs, such as pediatric respiratory medicine, endocrinology, and behavioral development. Once diagnosis and treatment processes are standardized, expansion into additional specialties and patient populations follows naturally.

“In Zhao Qiang’s view, Zhibei’s medical service system has already formed a closed loop of ‘Internet + outpatient care,’ with online revenue reaching the million-yuan level and annual revenue from its premier outpatient clinics exceeding the ten-million-yuan mark. The next key focus is to further enhance aggregation on the foundation of this closed loop. ‘Currently, in the clinic sector, there are only a handful of leading enterprises in the market. In summary, each has its own distinctive features; directions such as delivering exceptional patient experiences and productization are worth exploring in the future.’”

Currently, Zhibei has strengthened its collaboration with insurance companies such as JD Allianz and Xiao Yu San in terms of boundary expansion, exploring new "payment + service" models to enhance patient referral, convenience, and accessibility of commercial insurance payments.

Reviewing the development stages of Zhibei, by the end of 2016, it was in the initial phase of building the foundational infrastructure of its healthcare system. Currently, having established standardized pathways, it is in a phase of accelerated expansion.

Fang Fang, Investment Partner at Y Capital, summarized the operational performance of ZhiBei Medical: “ZhiBei has significantly optimized its single-store model, continuously refined the granularity of its management, and improved both capital efficiency and replication efficiency. This constitutes the core competitiveness that enables the clinic chain to sustainably scale. Having started online, ZhiBei is now establishing an increasingly solid offline presence.”