Revealing Tencent’s Investment Map in the Medical Field
2022 has seen shrinking investment from China’s top internet giants. Public information shows that Tencent has made more than 80 external deals so far this year, down from 210 last year. Not only has the quantity declined, but the projects receiving investment from the Shenzhen-based firm are now more related to “hard technology” sectors. Among these deals, Tencent has made six major moves within the medical field this year, investing in several medical device enterprises.
One of Tencent‘s biggest deals in the medical field this year was the stake it took in automated external defibrillator (AED)-focused Xunjie Medical. On September 19, Yuyue Medical, the parent company of Xunjie Medical, announced that it intends to introduce an affiliated company of Tencent as a strategic investor, by way of capital increase and share expansion. According to the announcement, Tencent intends to subscribe for 19.5% of the shares of Xunjie Medical by way of cash contribution, becoming the second-largest shareholder of the company, with a total amount of 291 million yuan ($41.5 million).
Chinese media outlet VBdate found that Tencent has deeply participated in the medical industry chain. The firm previously mainly invested in internet-based medical enterprises before 2018, preferring early projects and subsequent continuous stakes. The company has invested in Waterdrop Mutual during its angel-round financing and Medbanks in its B-round financing. Through mergers and acquisitions, Tencent can strengthen its competitiveness in the field of internet healthcare, and it can also ensure that it will not fall behind in the reform of internet healthcare.
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In 2019, Tencent President Martin Lau said that investment has become Tencent‘s core strategy. Subsequently, the company has made investments across several core fields in the medical industry, including accurate diagnosis, drug research and development, medical digitalization, high-value medical devices, synthetic biology, and chronic disease management. It is now investing in cutting-edge technology and also focuses on weak points in the Chinese medical system, such as the rehabilitation and pension industry and the AED field.
One thing that hasn’t changed with Tencent‘s investment style is the high level of capital. In 2018, Tencent invested in more than 35 enterprises in the medical field, with a total investment of more than 20 billion yuan. Tencent has still been forthcoming in recent investments, as the amount involved in financing is usually several hundred million yuan.
Tencent has also made some moves in the medical field apart from just investment. In terms of basic research, it has established a new Sustainable Social Value Organization (SSV) to integrate corporate social responsibility with public welfare charity. It is also cooperating with the China Association for Science and Technology. Moreover, Tencent will invest 10 billion yuan in the “New Cornerstone Investigator Project” to boost basic research in the next decade.
Leveraging the AI technology that Tencent excels at, it has carried out in-depth cooperation to develop “AI + pathology” products alongside medical firm Mindray. In March this year, the “fully automatic peripheral blood cell morphology analyzer” jointly developed by Mindray and Tencent AI Lab officially entered a special review procedure for innovative medical devices in China’s National Medical Products Administration. Besides, within the internet medical industry, Johnson & Johnson China’s personal health care division announced a comprehensive strategic partnership with Tencent in March of this year.