Qiangsen Healthcare Completes RMB 100 Million Series B Funding Round, Aims to Open 1,000 Community Clinics Nationwide and Rebuild Community Healthcare Ecosystem

April 16,Johnson Medical's founder and CEO, He Haiyang, told VCBeat,“Johnson Community Healthcare Group Announces Completion of RMB 100 Million Series B Financing, Co-Led by Renowned Venture Capital Firms Qiming Venture Partners and Legend Capital.”

Johnson Medical is a community healthcare group dedicated to building China’s first family-based accountable care organization. Previously, Johnson Medical completed its Pre-A round (Dehui Capital) in April 2015 and its Series A round (led by Legend Capital, with participation from Dehui Capital) in June 2016.

To date, Johnson has established and operated more than 20 community-based chain clinics in Xi’an and Chengdu, and has begun expanding into Chongqing, Wuhan, Zhengzhou, Taiyuan, Lanzhou, and other cities. By the end of 2017, its network is projected to reach a scale of 35 medical institutions.

So, what are Johnson Medical's next steps following this round of financing? How do investment firms view this project?

He Haiyang, Founder and CEO of Johnson Medical, stated that,This round of financing will be primarily used to accelerate nationwide expansion, deepen the development of community-based chain clinics, promote contracted family doctor services, advance the productization and promotion of medical service offerings, and intensify R&D efforts for the SaaS platforms “Yizhu Cloud Steward” and “Yizhu Cloud Clinic.”

“Seize the favorable opportunity presented by the current direction of healthcare reform, and leverage the power of capital to establish Johnson Medical as the first model of a new community-based medical service paradigm originating from Xi’an.”“...the bottom line,” He Haiyang remarked on his vision for the future. “China’s traditional, price-driven, fee-for-service healthcare model will inevitably evolve into a value-based, bundled-payment model under accountable care.”

“Johnson Medical will center on medical products, supported by offline chain clinics and powered by IT systems based on mobile internet technology, to create China’s first Consumer Accountable Care Organization (CACO), build a new future community healthcare ecosystem, and make high-quality medical services readily accessible.”

Public information shows that Johnson Medical was established in 2014 in the Xixian New Area of Shaanxi Province. With communities as its target and families at its core, the company has built an integrated, end-to-end health service system linking “clinics–communities–families,” promoting primary care at the community level to provide Chinese families with high-quality, convenient, and safe general practice diagnosis and treatment along with family doctor services.Strategic cooperation has been established with multiple renowned real estate developers, including Vanke, Huayuan, China Resources Land, Gemdale, Sunac, Tianlang, Agile, Shanghai Industrial Chengkai, and Ronghua, to integrate community medical facilities supporting a “15-Minute Medical Consultation Living Circle.”

Ouyang Xiangyu, Managing Director at Legend CapitalOn the future potential of Johnson & Johnson Medical: “The primary principle of tiered diagnosis and treatment is initial consultation at the primary care level, entrusting the ‘last mile’ of urban healthcare to community facilities. As a result, the large-scale outpatient volumes of public tertiary hospitals will shift downward, necessitating a sufficient number of primary care clinics to absorb this demand.”“Johnson Chain Clinics’ ecosystem chain of ‘cloud + terminal + products + services’ will create unique value in this process, undoubtedly providing beneficial pioneering exploration for the development of the entire industry.”

Gary Hu, Managing Partner at Qiming Venture Partnersstated, “Johnson Medical is an explorer and practitioner in the field of primary healthcare, closely aligning with the national policy directions on tiered diagnosis and treatment and family doctor services. Founder Mr. He Haiyang and his team are committed to building China’s most professional chain platform for community healthcare, helping more patients access more convenient, specialized, and high-quality medical services, while better coordinating and leveraging the value of medical resources. We are delighted to have the opportunity to participate and hope to accelerate the development of this endeavor through our investment.”

With clear policy guidance, shifting demographic structures, and upgraded healthcare consumption, the external conditions for an explosion in primary care are now fully in place. The value derived from “community”-level patient traffic, as a key entry point, offers boundless potential. Johnson Medical’s strategic vision to operate 1,000 community medical institutions across China is poised to lead a consumer revolution in the field of primary healthcare.

Qiming Venture Partners

Qiming Venture Partners, founded in 2006, has earned a distinguished reputation in China’s venture capital industry for its exceptional investment performance. It has established offices in Shanghai, Beijing, Suzhou, and Hong Kong. In 2016, Qiming raised a healthcare-focused fund in the United States and founded Qiming USA in Seattle. Currently, Qiming Venture Partners manages five U.S. dollar funds and four RMB funds, with total assets under management amounting to $2.7 billion.

Qiming Venture Partners is committed to becoming the preferred investment partner for China’s outstanding entrepreneurs. Since its inception, the firm has focused on investing in high-potential early- and growth-stage companies in the Internet consumer (Intersumer), healthcare, information technology (IT), and clean technology sectors. To date, Qiming has invested in more than 180 companies, over 30 of which have achieved investment returns through listings on the New York Stock Exchange, NASDAQ, the Hong Kong Stock Exchange, the Taipei Emerging Stock Market, the Shanghai Stock Exchange (A-shares), and the Shenzhen Stock Exchange, or via mergers and acquisitions. Its portfolio includes numerous well-known enterprises such as Xiaomi, Dianping, iTutorGroup, Mogujie, Meitu, Bilibili, Tigermed, Gan & Lee Pharmaceuticals, Zai Lab, WeDoctor, Hyperstrong, Face++, UBTECH, and Mobike. In terms of return on investment, Qiming Venture Partners has consistently maintained a leading position in China’s venture capital industry.

Legend Capital

Legend Capital, established in April 2001 and formerly known as Legend Investment (renamed Legend Capital in 2012), is a professional venture capital firm under Legend Holdings. The company currently maintains offices in Beijing, Shanghai, and Shenzhen. Legend Capital manages 17 USD and RMB-denominated funds, with total assets under management amounting to RMB 30 billion. As of the end of 2016, it had invested in over 300 companies, among which 50 have successfully gone public or been listed on equity exchanges, and more than 40 have exited through mergers and acquisitions.

Legend Capital focuses on innovation and growth opportunities in China, with key investments in TMT and innovative consumer sectors, modern services and intelligent manufacturing, healthcare, and culture and sports. Representative portfolio companies include iFlytek, Lakala, CAR Inc., Tan Yuan Technology, Berry Genomics, Yixintang, and KingMed Diagnostics.

Legend Capital envisions becoming “the most valuable, respected, and internationally influential investment firm.” By providing capital and managerial support, it fosters enterprise innovation and growth, plays a proactive role in advancing industrial progress and social development, and seeks to co-create fulfilling ventures with like-minded partners while sharing in their success.