111 Inc. Files for U.S. IPO, Aims to Raise Up to $200 Million
VCBeat (WeChat ID: vcbeat) reported on August 16 that on Wednesday local time, 111 Inc., the parent company of 1yao.com, filed a prospectus with the U.S. Securities and Exchange Commission, seeking to raise up to $200 million. The company will trade under the ticker symbol “YI,” with JPMorgan Chase, Citigroup, and CICC serving as underwriters.
1Drug.com initially began as a sub-channel of Yihaodian before operating independently. In 2015, Dr. Yu Gang and co-founder Mr. Liu Junling left Yihaodian to devote themselves fully to the operation of 1Drug.com.
“We are thrilled about the new venture we are about to launch, which applies Internet thinking to the digital and mobile health sectors to address the challenges of difficult access to medical care and high medication costs faced by the Chinese public, thereby creating greater value for society,” said Dr. Yu Gang.
Dr. Yu Gang told VCBeat that his entry into the “Internet + Healthcare” sector was primarily driven by two factors. First, he observed mature industry development paths in other countries, particularly the United States, where the market size of “Internet + Healthcare” had already reached trillions of dollars, while China was just getting started. Second, his previous entrepreneurial experience in e-commerce gave him great confidence in the “Internet +” model. In the book and 3C (computer, communication, and consumer electronics) industries, the “Internet +” model had already established a foundation and standards that could be transferred to the pharmaceutical sector.
Currently, 1YaoWang refers to its three core business segments as the “Three Carriages”—a B2C pharmaceutical platform, an internet hospital, and a B2B pharmaceutical platform—providing services such as online pharmacy, internet hospital, and pharmaceutical distribution solutions, respectively.
Over the past eight years of operation, 1 Drug Net has also achieved a series of “impressive” metrics.
15 million+: The official website, app, and mini-program of 111.com have over 15 million registered users;
270,000+: 111.com offers over 270,000 SKUs, ranking among the industry leaders and meeting nearly all user needs;
23&24: Covering 23 major provinces across China, with a comprehensive warehousing system enabling 24-hour delivery;
2,000+: 1YaoWang and 1Zhen (Southwest Internet Hospital) employ over 2,000 in-house and third-party medical professionals to provide users with diagnosis, treatment, and pharmaceutical services.
According to the prospectus, 111 Group’s revenue in 2017 was $145 million, representing a 10% increase from 2016. The net loss for 2017 narrowed by 31% year-over-year to $37.7 million.
In the first six months of 2018, 111 Group’s revenue surged 68% to $110.5 million. The net loss for January through June was $19.6 million, compared with a loss of $18.5 million in the same period of 2017.
(Source: Prospectus submitted on August 15, 2022)
According to the VCBeat database, 1 Drug Store previously completed five rounds of financing, with a total amount exceeding RMB 1.5 billion. Based on this calculation, the valuation of 1 Drug Store may have reached the scale of a “unicorn.”
1. Historical Financing of 111.com
According to the prospectus, 111 Group will use the proceeds from the fundraising for general corporate purposes, research and development, as well as sales and marketing.
From the perspective of development trends in the pharmaceutical distribution and retail sectors, the integration of “Internet + Healthcare” is an inevitable path for industry growth, positioning 111.com at a highly strategic juncture. First, intensive development is a shared characteristic of both the pharmaceutical distribution and retail industries. Against the backdrop of policy, industrial, and technological advancements, mergers and acquisitions, scaling up, and the development of “Internet + Smart Healthcare” will be the dominant themes in the coming years.
From the perspective of development trends in pharmaceutical e-commerce, the industry is currently in a phase of rapid expansion. According to statistical data from the Department of Market Order under the Ministry of Commerce, incomplete statistics indicate that the total sales revenue of directly reporting pharmaceutical e-commerce enterprises reached RMB 73.6 billion in 2017, with B2B transactions accounting for RMB 69.3 billion and B2C transactions for RMB 4.4 billion. The corresponding figures for 2016 were RMB 61.2 billion, RMB 57.6 billion, and RMB 3.6 billion, respectively, reflecting year-on-year growth across all three metrics in 2017 compared to 2016.
1 Drug’s mission is to “empower” the industry. Its technological tools and service systems are not only used internally but also extended to industry partners through collaboration and services, thereby “empowering” the sector, building an Internet-plus pharmaceutical and healthcare ecosystem, improving operational efficiency, reducing distribution costs, and enhancing the accessibility of high-quality products and services.
“Over the past eight years of entrepreneurship, we have consistently pursued value creation—creating value for the industry and for society. This is our vision and mission, and we will remain steadfast in this commitment,” stated Dr. Yu Gang.