Chinese pharma app seals $133m series D funding

Pharmaceutical trading platforms like Yaoshibang help stores in dispersed and remote cities to meet the increasing demand of patients.

Chinese B2B pharmaceutical trading platform Yaoshibang has completed its $133 million Series D fundraising on Monday.

Tiger Global, H Capital and DCM Ventures all participated.

Proceeds will be used to hire more talent and to improve platform security.

Yaoshibang is a B2B platform which connects pharmaceutical companies, drug stores and clinics. It sells medicines wholesale together with software services so that chemists can track purchases. Launched in 2015, the platform also offers a training programme for pharmacists.

The platform, which serves 200,000 chemists and clinics online, claims that it sells a gross volume of Rmb10 billion ($1.4 billion) with 1 million orders a month, according to CEO Zhang Buzhen. 

Yaoshibang is a rising star in the capital markets. It raised $60.8 million Series C funding in June from Shunwei Capital, Susquehanna International Group (SIG), DCM Ventures, Green Pine Capital Partners and two other funds. Previously, it raised $15.9 million Series B funding last year and $10 million in 2016 for its Series A round. Fosun Pharmaceutical joined both A and B rounds.

People increasingly use pharmacies for over-the-counter medicines, rather than queue at the hospital for prescriptions. Annual drug sales increased by about 8.4% year-on-year in 2017 to Rmb2 trillion, while retail drug sales contributed 20% of it. The growth of the retail market hit 9% last year, faster than the overall market.

China has around 453,000 pharmacies, half of which are independent. No wonder then that it is seen as a market with great potential. For the past three years, the Chinese government has been attempting to alleviate the pressure on hospitals in big cities. Last year, drug sales in third and fourth-tier cities surpassed first and second-tier for the first time, which points to a huge demand from the underserved market.

It is here where the independent pharmacies are located. As they need a more efficient way to replenish their stock, online B2B pharmaceutical platforms have become their first option.

It is precisely this $48 billion market that Yaoshibang is targeting. What will also help drive the market is the opening-up policy for clinical drug trials. Competition is likely to increase, especially as China wants to develop a full retail pharmacy system by 2025.


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