OrthoRehab Pioneer MedData Files IPO Prospectus, Led by Cross-Industry CEO Sun Xiaoyi

Sun Xiaoyi, Founder and CEO of Yishu

YiShu is a mobile health product specialized in orthopedics, creating an "Internet+" closed loop in the field of orthopedics and rehabilitation by integrating online and offline rehabilitation industries. Currently, the YiShu APP covers orthopedic surgeons from more than 3,800 hospitals across China, with content including approximately 300 rating scales, 2,300 exclusive rehabilitation videos, and over 2,000 customized professional rehabilitation plans for orthopedic patients.

When VCBeat arrived at Yishu’s office in Shanghai, CEO Sun Xiaoyi had just rushed back from outside, still bearing the dust of travel. “My colleagues and I just went to evaluate a piece of equipment. After trying it out, we found it quite intriguing and couldn’t help but spend some extra time examining it,” Ms. Sun apologized to us. She then showed VCBeat photos on her phone of herself using the device, explaining that it is an assessment tool for evaluating motor function rehabilitation status. This equipment is crucial to Yishu’s strategic layout for its offline rehabilitation clinics. The slight delay was due to the need to clarify some key data points.

“Hands-on involvement” was the first impression Sun Xiaoyi left on VCBeat. As our conversation progressed, it became clear that this very spirit enabled Sun, a former lawyer, to lead the Yishu team in carving out a niche in the highly specialized field of orthopedics.

In the field of internet healthcare, we frequently see entrepreneurs with internet backgrounds. However, most of them focus on front-end or back-end medical processes such as appointment registration, consultations, health information, and health management, aiming to transform the healthcare environment through internet thinking. In contrast, in highly specialized and vertically integrated medical fields, entrepreneurs with medical backgrounds are more commonly observed. So how did Sun Xiaoyi, a former lawyer, enter the orthopedics sector and found Yishu?

To date, Yishu represents Sun Xiaoyi’s third entrepreneurial venture. None of these three ventures were related to her profession as a lawyer; rather, they stemmed from her personal interests and needs. Her first venture was establishing a medical aesthetics clinic, and her second was in the mobile gaming industry. The third venture, Yishu, was founded in response to an accidental injury suffered by Sun Xiaoyi’s husband.

In 2014, Sun Xiaoyi’s husband underwent surgery for a hand fracture but failed to achieve adequate rehabilitation, resulting in a “claw hand” deformity. Apart from herself, every member of Sun Xiaoyi’s family is a physician. Despite consulting top specialists and implementing the optimal surgical plan, they overlooked the importance of rehabilitation, leading to suboptimal surgical outcomes. In orthopedics, it is often said that success depends equally on surgical skill and postoperative care (“50% surgery, 50% recovery”). For procedures such as fracture fixation and joint replacement, in addition to professional surgical intervention, orthopedic surgeons place significant emphasis on patient management and follow-up care. At that time in China, there was a general lack of awareness regarding rehabilitative therapy; even if patients sought such services, suitable rehabilitation facilities were scarcely available.

Medical facilities in overseas communities are well-equipped, with family physicians, dental clinics, and rehabilitation clinics invariably providing primary care services. In contrast, while China has a considerable number of community outpatient clinics and the private sector has driven decent growth in dental practices, there is a severe shortage of community-based rehabilitation services. Outdated perceptions and market gaps have revealed entrepreneurial opportunities in the healthcare sector for Sun Xiaoyi.

Dr. Ye Tingjun, an orthopedic surgeon at Shanghai Ruijin Hospital, is a friend of Sun Xiaoyi. During a consultation regarding hand issues affecting Sun’s husband, the two found their entrepreneurial ideas in the field of orthopedic rehabilitation aligning, which led them to embark on a joint venture. Sun Xiaoyi describes her business partner as follows: “Whenever I start a new venture, although I am not a specialist in product development, I seek out professional co-founders. In the early stages of a startup, what is needed is ‘N+1’ resources. My strengths lie in promotion and market operations; thus, I am responsible for the ‘N’—resources such as funding, professional networks, market operations, and marketing. My partner, Dr. Ye Tingjun, represents the professional ‘1.’ He has the deepest understanding of what orthopedic surgeons and patients truly need, making him the key figure driving Yishu’s深耕 (deep cultivation) in the highly specialized vertical sector of orthopedics.”

Although Sun Xiaoyi is a cross-industry entrepreneur in the medical field, the abundant medical resources surrounding her have provided the greatest support to her entrepreneurial journey. Of course, external assistance serves only as a supplement; the key lies in her own unremitting efforts. At the inception of the company, Sun Xiaoyi did not immediately determine the product direction but instead devoted herself to gaining a comprehensive understanding and conducting thorough investigations of the healthcare industry. During the first three months after the company’s establishment, Sun Xiaoyi spent extensive time at multiple hospitals in Shanghai. Throughout these three months, in addition to mastering the workflows of the healthcare industry and observing its challenges, she also sought to identify the future development direction for her company.

“The healthcare industry is vast. Services such as appointment registration and lightweight consultations have already been well developed by pioneers, and these areas may also risk crossing regulatory red lines. Therefore, we will not venture beyond our core competencies; instead, it is easier to identify a niche segment within the healthcare industry that lags relatively behind in internet-based development,” said Sun Xiaoyi, explaining why her company chose to enter the internet healthcare sector through orthopedics.

When choosing her entrepreneurial direction, Sun Xiaoyi stated that she would definitely avoid creating broad, all-encompassing content. Instead, she aimed to identify a niche sector within any industry that suited her strengths. When founding her gaming company, she opted for anime-style games targeted at female players, a segment with relatively limited market presence at the time. Upon establishing Yishu, she evaluated several specialized medical fields, including pediatrics, gynecology, gastroenterology, and internal medicine, before ultimately selecting orthopedics.

First, orthopedics is one of the three most profitable departments in hospitals. Second, orthopedic conditions are categorized into acute and chronic types. Post-operative recovery from fracture surgeries and the management of chronic orthopedic conditions, such as cervical and lumbar back pain, largely require out-of-hospital care provided by rehabilitation therapists, representing a substantial market opportunity. Third, our partner, Dr. Ye Tingjun, is an orthopedic specialist who has closely monitored the development of diagnostic and therapeutic tools for orthopedic surgeons throughout his more than ten years of clinical practice. He has accumulated extensive insights and experience, ranging from the use of basic Excel spreadsheets to the adoption of mobile internet technologies.

From the perspective of VCBeat, two choices made by Yishu at the outset of its venture were crucial. First, it chose to launch in a vertical niche with less competition. Second, the founders’ and partners’ resources and expertise in the healthcare sector ensured the correctness of the company’s strategic direction.

After choosing to enter the vertical sector of orthopedics and rehabilitation, Yishu has undergone three stages of development.

In the first phase, Dr. Ye Tingjun designed and refined a patient management tool tailored to the needs of orthopedic surgeons, serving both orthopedics and rehabilitation specialists. Due to its practicality and innovation, the product was rapidly adopted by orthopedic surgeons during its pilot implementation at Ruijin Hospital, leading to a collaborative partnership with Pfizer Pharmaceuticals. Meanwhile, in June 2015, Yishu secured several million RMB in angel funding invested by KellyMed Medical Technology Co., Ltd. As a company listed on the Shenzhen Stock Exchange, KellyMed specializes in the research, development, manufacturing, and sales of minimally invasive surgical systems for orthopedic interventions. This partnership has significantly aided Yishu in expanding its network of physicians and hospital resources within the orthopedic field.

In its early development stage, Yishu generated revenue primarily through two channels. First, leveraging its accumulated resources of orthopedic surgeons on the B2B side, it attracted interest from pharmaceutical companies and medical device manufacturers, thereby securing marketing promotion fees from them. Second, it facilitated research projects by replacing the Excel spreadsheets previously used by physicians with a system that completed clinical studies through comprehensive patient follow-up data. However, pure tool-based software lacks technical barriers, is easily replicated, and cannot establish a closed-loop business model. Consequently, Yishu pursued its next phase of development, evolving from a physician-focused tool to a service provider for both doctors and patients.

In the second phase, Yishu evolved into an intelligent disease management platform, providing physicians with patient follow-up tools while offering patients rehabilitation plans and high-quality medical content. Through standardized process design and scheduled patient management timelines, the platform automatically generates patient reminders, helping physicians improve work efficiency. Yishu offers orthopedic and rehabilitation protocol templates designed by directors and medical teams from renowned Grade A tertiary hospitals in China for physician use. Attending physicians can further provide customized follow-up and rehabilitation plans to facilitate patient recovery. Leveraging its expertise in orthopedics, Yishu rapidly established the industry’s largest library of orthopedic rehabilitation protocols, assessment scales, and educational materials on its platform. In March 2016, Yishu secured tens of millions of RMB in Series A financing, led by Yonghua Investment under Guojin Securities, with participation from Chunyuan Capital and other investors.

In the third phase, after expanding from the physician side to the patient side, Yishu began to lay out offline clinics. This was Sun Xiaoyi’s original intention when she started her business: to identify commercial opportunities in the orthopedic rehabilitation industry by addressing the lack of community-based rehabilitation clinics. During this phase, Yishu will also generate revenue by offering paid rehabilitation programs and assistive rehabilitation hardware.

China’s rehabilitation market is vast, yet the number of patients actually receiving rehabilitation services remains very low. Patients are often unaware of where to seek rehabilitation care or who can assist them in this process. If Yishu were to directly target hospital rehabilitation departments, it would struggle to succeed given the scarce patient volume in public hospitals’ rehabilitation units. However, there is a referral relationship between orthopedics and rehabilitation. Only orthopedic surgeons can capture first-line rehabilitation patients and refer them to the Yishu platform and its offline clinics. This constitutes Sun Xiaoyi’s entrepreneurial logic.

Currently, Yishu has established two “Youfu” rehabilitation clinics in Shenyang and Shanghai. Through two years of tracking via its software platform, Yishu identified the most active physicians on its local platform and partnered with them to establish offline clinics. In addition to accessing professional rehabilitation plans from orthopedic specialists online, patients can receive rehabilitation services and assessments at these physical locations. Going forward, “Youfu” clinics are set to expand into multiple regions, comprehensively entering the orthopedic rehabilitation sector through an integrated online-to-offline model.

Throughout the interview, Sun Xiaoyi spoke with clear organization and a rapid pace. This mirrors her entrepreneurial journey, which has been characterized by well-defined business model design and clear logic. “Since its inception, Yishu’s plans and goals have consistently progressed according to our original roadmap, without any deviations,” said Sun Xiaoyi. Perhaps it is precisely this rigorous and comprehensive thinking that has enabled Yishu to avoid common pitfalls and carve out its own niche in the specialized field of orthopedics.