JD.com’s health subsidiary announced that it has raised USD 830 Million from private equity firm Hillhouse Capital during the Series B financing. The equity firm is already an early backer of JD Health and also a renowned investor in the healthcare industry.
After Chinese competitor Alibaba who made a move to expand its branch in the healthcare sector, JD.com rolled out its telemedicine and pharmacy delivery services a year ago. Their business also includes gene testing which was possible after partnering with prominent institutions.
In 2019, JD.com announced that its healthcare unit is valued at USD 7 Billion after it raised around USD 1 Billion in Series A round in November. Amidst the COVID-19 pandemic, JD Health witnessed a surge in its consumer-related health services. The company’s CEO Xin Lijun announced that the business has “achieved profitability” last year.
Until now, various Chinese companies such as Ali Health, Tencent Trusted Doctors and Ping An Healthcare and Technology are striving to occupy the multi-billion dollar market; however, most of them are struggling to turn profitable. “If you want to expand vertically into the retail drug business, it has to be integrated with hospitals and the medical services they provide,” Xin said in an interview. JD Health won’t be only limiting itself to the current business but is looking forward to turning their partnered hospital technologically advanced with artificial intelligence.
According to the study by Deloitte, the Chinese pharmacy sector is anticipated to reach USD 57 Billion in valuation by 2020. Recently, JD Health announced that it’s enabling a family doctor service that would redefine the scenario of telemedicine in China. The company states that under these services, the entire family will get 24-consultation services which would include the exchange of texts, photos, and video or phone calls. According to Xin, the firm is expected to serve over 50 Million families over the next five years.
The CEO said in an interview that “JD Family Doctor will be closely integrated with the country’s primary healthcare systems.” He also added that it will “improve the entire family doctor experience in China.” In 2018, China introduced a policy that encouraged the companies to partner with healthcare providers and also allows online sales of prescription drugs which were earlier a matter of controversy.
Last year, JD Health was announced as the most valuable startups in China last year while ranked No.2 worldwide following Uber’s self-driving division, Uber Advanced Technologies Group which has a valuation of around USD 7.3 Billion, according to TechCrunch. JD Health’s CEO told The Post that there are plans for IPO but the time period has not been decided yet.
The coronavirus outbreak has encouraged the investors to invest in telemedicine and the online pharmacy market owing to the “new normal” trend in the economy. Recently, Reliance Industries Limited (RIL) acquired Netmeds, an online pharmacy store, for USD 63 Million while Johnson & Johnson invested in telemedicine startup Thirty Madison. According to the market research report, the telemedicine market is expected to grow at a rate of at least 15% in the coming years.