Ex-HongShan partner Lu Xiaobo has launched a venture capital (VC) company to capitalise on his expertise in healthcare investments in China, according to multiple Chinese media reports citing Lu.
The new VC brand, whose Chinese name can be directly translated to “Hongchuang Capital,” has already reached the first close of its debut RMB fund despite being a first-time fund in a challenging fundraising market.
The number of Chinese PE-VC funds which managed to raise capital in the first three quarters of 2024 was down 49.2% year-over-year (YoY), while the overall amount raised by them was 26% lower than the same period last year, according to data from Zero2IPO Research.
The debut RMB fund roped in limited partners (LPs) including five publicly-listed Chinese healthcare companies, such as contract research organisation (CRO) Hangzhou Tigermed Consulting, which invested in the fund through its Tailong Investment, said Lu in an interview with Institutional Investor Review (IRR).
A technology-focused fund-of-funds (FOF) backed by medical device maker Andon Health’s founder Liu Yi, biotech firm Innovita Biological Technology, medical equipment manufacturer Cofoe Medical Technology, and state capital investors in Shanghai and Tianjin also committed, according to the IRR report.
DealStreetAsia has reached out to HongChuang Capital for more details about its first RMB fund.
Lu believes that the valuation of healthcare startups has gradually returned to a reasonable range, after the past two years of significant market adjustments and downturns.
The “main agendas” for China’s healthcare industry in the next decade include “advancing medical technology innovations, developing domestic alternatives, and tackling bottlenecks in the healthcare industry chain,” said Lu in July at a Tsinghua University alumni reunion in Beijing.
Lu, born in 1973, had an over-five-year stint at HongShan where he focused on innovative drugs, medical devices, in vitro diagnosis, healthcare services, and other health segments since 2017. Before HongShan, he was a partner at China’s Cowin Capital, a 24-year-old VC firm with more than 35 billion yuan ($4.83 billion) in assets under management.
His landmark healthcare deals include Betta Pharmaceuticals, which was dubbed as the first innovative drug developer to go public in mainland China when it pulled off a $106-million initial public offering in Shenzhen in 2016.
Lu also led investments in the now Shenzhen-listed genomic sequencing firm BGI Genomics; and biopharmaceutical firm Innovent Biologics, one of the first biotech companies to list in Hong Kong under the exchange’s 18A listing regime.
