Hillhouse Capital’s VC firm leads $15m round for Chinese healthtech brand

Zdeer, a Wuhan-based healthtech brand, announced that it has secured over 100 million yuan (US$15.2 million) in a series A+ round led by Hillhouse Capital’s GL Ventures.

Crystal Stream Capital, Tiantu Capital, Cowin Capital, and Country Garden Venture Capital, the investment vehicle of Chinese property developer Country Garden, also participated in the round.

Photo credit: Zdeer

Founded in December 2014, Zdeer has rolled out two kinds of products: the smart moxibustion device, which is used to provide pain relief, and the smart steam footbath. It has over 10 new products that are in the research and development stage.

Explaining why the startup chose to focus on developing moxibustion, its team said that the company is targeting young people born from post-1985 until into the ’90s. As traditional moxibustion therapy is done by burning wormwood on particular parts of the body, usually resulting to patients getting burned, Zdeer’s smart moxibustion device could help address the problem and provide a better user experience for the younger generation.

The company claims that it has maintained a 100% growth rate in average annual revenue during the past five years, even during the pandemic. With the new funds, it will accelerate its product development and production.

The Chinese healthcare industry is currently ranked second behind that of the US, reaching US$1.1 trillion in 2019. However, health expenditure in the nation, which include spending on pharmaceuticals, medical devices, distribution, hospitals, pharmacies, and insurance, accounted for only 6.57% of the total GDP in 2018, with the market remaining relatively undeveloped.

Currency converted from Chinese yuan to US dollar: US$1 = 6.54 yuan.