Hong Kong-based venture capital firm Ori Capital is raising US$350 million for a new fund focused on Chinese healthcare startups.

Founded in 2015, the firm has previously concentrated on global biotech investments.

The planned fund aims to attract investors from mainland China, Hong Kong, other parts of Asia, and Europe, according to founder and senior partner Simone Song.

Ori Capital seeks to engage with the growing Chinese biotech sector, where global pharmaceutical companies are becoming more active.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s biotech industry transforming from follower to global innovator

China’s transformation in biotech is demonstrated by its dominant position in pharmaceutical licensing deals. Six of the world’s top 10 pharmaceutical licensing deals in Q1 2024 involved Chinese biotech firms, with Chinese companies now accounting for 30% of global licensing deals 1.

Since 2022, Chinese biotech companies have added over 4,100 innovative drugs to their pipelines, representing 31% of the global total, which is why venture capital firms like ORI Capital are increasing their Chinese investments 1.

The country has established particular strength in next-generation therapeutics, especially antibody-drug conjugates and CAR-T therapies, while also making progress in CRISPR research for diverse diseases including rare conditions 1, 2.

ORI Capital’s $350 million fund targeting Chinese healthcare startups reflects a broader recognition that China has evolved from being primarily a manufacturer to becoming a significant source of pharmaceutical innovation.

2️⃣ AI integration driving biotech investment surge and reshaping economics

ORI Capital’s reference to China’s “DeepSeek moment” in biotech points to the transformative impact of artificial intelligence on drug discovery and development.

The financial implications are substantial, with AI projected to generate $350-410 billion annually for the pharmaceutical sector by 2025 and significantly reduce both time and costs in drug development, potentially cutting development time by 40% and costs by 30% 3.

This AI revolution is evident in the rapid pace of adoption, with over 100 new drug submissions using AI reported in 2021 and the FDA approving approximately 700 AI healthcare algorithms 4.

Investment in AI healthcare applications continues to grow despite the general downturn in venture capital funding, indicating strong market confidence in AI-powered biotech solutions 4.