Home NephroFighter Founder He Xianglin Files IPO Prospectus: A Patient-Turned-Entrepreneur's Mission to Transform Chronic Kidney Disease Management

NephroFighter Founder He Xianglin Files IPO Prospectus: A Patient-Turned-Entrepreneur's Mission to Transform Chronic Kidney Disease Management

Nov 23, 2016 08:00 CST Updated 08:00

“I used to work at a startup. Due to my own kidney disease, I developed the ‘Kidney Warrior’ app as a side project to manage my condition on a daily basis. After finding it effective through personal use, I hoped it could help more people. So I submitted the app to mobile app stores and posted an introductory article about it on Baidu Tieba, where I saw promising download numbers. As a result, he resigned from his job to work full-time on the ‘Kidney Warrior’ app,” He Xianglin told VCBeat (WeChat ID: vcbeat) in a straightforward manner.


In March 2015, He Xianglin established Wuhan Shan Bu Yan Gao Technology Co., Ltd. With only a few team members and thanks to the support of key benefactors, the company secured RMB 300,000 in seed funding from Shanghai Xinjin Venture Capital one year later, in exchange for a 10% equity stake. Subsequently, the firm made an additional investment of RMB 1 million.


Compared with other healthcare financing deals worth tens or even hundreds of millions, this round of funding may seem insignificant; however, it holds extraordinary significance for He Xianglin.


"Identified the Needs of Kidney Disease Patients Due to Personal Illness"


He Xianglin’s entrepreneurial story is both serendipitous and authentic. After being diagnosed with kidney disease himself, he developed a kidney disease management app to monitor his own condition, and users even donated money to him...


It was only after he became directly involved in kidney disease management that he realized there are currently over 120 million patients with early-stage chronic kidney disease in China, representing an annual diagnosis and treatment market worth approximately RMB 360 billion, a market size that continues to expand as awareness rates rise.


Although the population of patients with kidney disease is large, most do not receive standardized treatment in the early stages. Due to traditional Chinese beliefs that view kidney deficiency or kidney disease as shameful, many prefer to purchase over-the-counter kidney tonics and supplements rather than seek medical care at hospitals. Over time, this may progress to uremia, ultimately requiring either kidney transplantation or dialysis.


In addition to the large base of kidney disease patients, He Xianglin has identified many other pain points among them. For instance, due to the sensitive nature of kidney diseases, reluctance to seek medical attention is common, causing early-stage patients to easily miss or struggle to seize the optimal treatment window. Kidney disease treatment is prolonged and costly, and managing and storing the vast amount of medical records and laboratory test reports poses significant challenges.FileThe prolonged rehabilitation process makes patients prone to discontinuing treatment midway.


To this end, He Xianglin, himself a kidney disease patient, hopes to help more patients. Thus, he transitioned from part-time work to dedicating himself fully to kidney disease management. With no funding and no team, he faced the inevitable challenges of starting from scratch.


"In March this year, it secured a 300,000 RMB seed round in Shanghai, followed by an additional investment of 1 million RMB."


To date, He Xianglin is deeply grateful to Liu Yu. Thanks to Liu Yu, he was introduced to Shanghai Xinjin Venture Capital, which initially invested RMB 300,000 in the seed round for a 10% equity stake, and subsequently made an additional investment of RMB 1 million. Liu Yu provided significant assistance in both rounds of financing. In January 2016, Liu Yu founded the Entrepreneurship Matchmaker Public Welfare Service Center in Hongshan District, Wuhan City. The center, formerly known as the Entrepreneurship Matchmaker Studio, aims to provide entrepreneurs with free public welfare services such as startup guidance and resource linkage; screen and recommend high-quality projects to investors; facilitate negotiations and matchmaking between entrepreneurs and investors; and organize public welfare entrepreneurial activities, including meetings and roadshows, to support the growth of entrepreneurs.


Xinjin Venture Capital is an early-stage investment firm focused on two key sectors: mobile internet and life sciences, managing both RMB and USD funds. Xinjin has invested in over 50 projects across eight cities in China, including HaoMaiche, Geyi Network, Haitou.com, Feiyu Cloud Communications, Moqi Landscaping, Weicai Wealth Management, and Wuhan Weipai. Seizing a strategic opportunity to enter the healthcare sector, it invested in Kidney Warrior.


In He Xianglin’s view, the reason for Shanghai Xinjin’s additional investment of RMB 1 million is quite simple: they believe that the “Kidney Warrior” team understands patients’ needs, and its physician network and market operations are gradually taking shape. Currently, the app has 20,000 users and 30,000 laboratory test records. Secondly, they consider this endeavor socially meaningful and capable of effectively addressing the pain points of kidney disease patients, especially as a large number of internet companies focused on kidney disease management have emerged in the market.


Two Product Systems to Better Meet Patient Needs


With the rise of “Internet + Healthcare” initiatives, entrepreneurs are increasingly entering various niche sectors. In the field of nephrology, platforms such as Ai Shen Wang (Love Kidney Network), Zhang Shang Shen Yi (Pocket Nephrologist), and U Shen Wang (U-Kidney Network) have emerged. Research by He Xianglin has found that these single-function consultation platforms suffer from low user retention; their standalone software product format offers limited scalability; and their scope of diagnosis and treatment is insufficiently comprehensive. For instance, Ai Shen Wang primarily targets patients undergoing dialysis.


To enhance the market competitiveness of Kidney Fighter, He Xianglin has developed a product ecosystem comprising three components: the Kidney Fighter app, Kidney Fighter smart hardware—specifically, a smart home urine analyzer—and an upcoming non-profit mutual aid platform for kidney patients.


A non-profit mutual aid platform for kidney disease patients, primarily targeting consumer-end users. Upon joining the platform, each user pays a certain fee, which is held in escrow by a third-party fund management company. If a user is diagnosed with uremia after paying the fee, the mutual aid platform will provide compensation. For example, if the platform has 300,000 members and one member is unfortunately diagnosed with uremia, the platform’s data calculations may determine that the maximum mutual aid amount eligible is RMB 300,000. In this case, each member contributes RMB 1 to collectively raise the RMB 300,000 for the patient with uremia.


In the future, the Kidney Warrior App will integrate with the data from the Kidney Patient Mutual Aid Public Welfare Platform, directing consumer-end users to the Kidney Warrior App to increase its user base. The app’s services primarily include the management of patients’ lifestyle habits, dietary data, and treatment data.


Expanding Profitability Around the Product


Regarding profitability, He Xianglin has proposed three strategies. The first is to offer value-added services, such as a creatinine clearance rate calculator, priced at one yuan per download in app stores. Current statistical data show that it has risen to the top spot on the medical paid apps chart, demonstrating that software-based value-added services can be profitable. The second strategy involves collaborating with upstream and downstream partners in the healthcare industry chain—such as specialized food e-commerce platforms, pharmacies, hospitals, and online stores selling supplies required by kidney disease patients—given that renal patients generally require low-protein diets. The third strategy is to sell kidney disease monitoring devices; survey results indicate that 50% of users are willing to purchase smart home health management devices.


As more users join and data accumulates in the future, Kidney Fighter will integrate long-term data to establish post-service feedback tracking and forge partnerships with hospitals, pharmaceutical companies, and medical device manufacturers.


To date, the greatest challenge He Xianglin has faced is not monetization, but obtaining the necessary corporate qualifications and licenses. For instance, selling pharmaceuticals requires specific drug distribution credentials, which are difficult to secure; providing medical consultations necessitates proper medical practice qualifications. Currently, they are actively applying for various required certifications.


He Xianglin, the founder and CEO of this project, was previously a partner in a mobile internet team that secured Series A funding from investors such as IDG. The other two co-founders are Liu Tao, the COO, who holds a master’s degree in software engineering and has seven years of experience in the telecommunications industry and two years in medical device projects, having worked at Huawei and FiberHome Technologies; and Xiong Zhijun, the CTO, who has eight years of experience in software development, platform development, and architecture design, with prior tenure at Focused Photonics Inc. and Muchuang Technology. All founding partners hold bachelor’s degrees in computer science from Huazhong University of Science and Technology.


Among competitors, although there are many physician-led teams and well-funded, capable entrepreneurial teams, He Xianglin believes that, “Our team, founded by patients, understands patient needs and includes physicians as members, so we also have a deep understanding of the doctor-patient relationship.”


Kidney Warrior focuses on patients in the early stages of kidney disease, a large user base, and combines smart hardware with software for diversified offerings. Ultimately, it integrates smart hardware, remote diagnosis and treatment, rehabilitation plans, and a patient community, thereby expanding the scope of care. As such, He Xianglin is highly confident about the prospects in this niche sector.


Unlike other entrepreneurs, who might move on to the next venture after a startup fails, he will not. He regards this as his lifelong career; as long as there is a glimmer of hope for the project, they will persevere and strive to keep it alive.