Leading third-party medical testing service provider, Chain Medical Labs (CMLabs), recently announced that it raised hundreds of millions of RMB and the completed its latest B round of financing. The co-lead investors were C-Bridge Capital and Huatai Ruihe Healthcare Industrial Fund. The follow investors included Hanfor Capital and Zheshang Venture Capital. In 2015, CMLabs completed its A round financing with investments from Qiming Venture Partners and Keysfund China Limited and in 2016, the company completed its A+ round financing with support again from Qiming Venture Partners. During this latest round of financing, CEC Capital served as the sole financial adviser to CMLabs.
Since CMLabs was founded in 2012, Mr. Yao GUO, Chairman of the Board of Directors, has served as the leader of the company’s management team. After nearly six years of rapid development, CMLabs has established two main lines of business, namely medical inspection and forensic identification. Operating at the middle of the supply chain, CMLabs plans to expand its operations to include diagnostic reagent production upstream as well as inspection, packaging, procurement, and contracting services downstream. The company has operations in the ten major cities of Shanghai, Hangzhou, Wuhan, Hefei, Nanchang, Chengdu, Jinan, Changchun, Changsha, and Zhengzhou and plans to gradually expand its operations in the south, southwest, north, northwest, and northeast of China. With its ISO 15189 and CAP accreditations, a strong management system, a quality reputation, and top quality control standards, the young and strong CMLabs has managed to establish a competitive edge within the industry. Furthermore, one of the subsidiaries of CMLabs will be incorporated in the New Hongqiao International Medical Center Shared Facility in Shanghai.
In recent years, policy decisions made by the Chinese government have fostered the development of a third-party medical testing industry. However, China’s third-party medical testing industry still has a penetration rate that is less than 5%, which is 40-70% that of certain countries of the developed world (i.e. the U.S.A., countries in the E.U. and Japan). Thus, China’s industry has great potential for growth. Currently, China has over five hundred companies offering third-party lab services, but few of these companies have the capabilities necessary to establish a nationwide franchise or brand. This reflects the challenges and opportunities that exist for companies competing in China’s third-party medical testing industry. CEC Capital is confident that the CMLabs’ management team—with its acute foresight and exceptional operational capabilities—can guarantee that CMLabs continues to serve as an industry leader. With these assets, CMLabs is a particularly attractive investment opportunity for investors.
The Chairman of CMLabs, Mr. Yao GUO, shared that he is confident that the capital secured during this round of financing will promote the strategic development of CMLabs as a third-party medical testing service provider. CMLabs plans to use the funding to continue expanding the company’s service network through the construction of regional medical testing facilities, while also developing its platform for online diagnosis.
CEO of C-Bridge Capital, Mr. Wei FU, commented that as a private equity fund, C-Bridge Capital focuses on investments in the health care sector. C-Bridge Capital has medical experts with a variety of specializations. Mr. FU’s team is confident that CMLabs—led by such a highly-qualified team of experts—has great prospects. Compared with developed nations (i.e. the U.S.A., Japan, and E.U. countries), China’s third-party medical testing services have a low penetration rate. Policy decisions that aim to control medical costs, introduce medical referrals, set treatment prices according to disease types, and upgrade medical technologies have created a unique environment that is advantageous to the future growth of China’s third-party medical testing industry. Over the past few years, competitors have competed for a share of the third-party medical testing market, yet the industry has not reached maturity. Since its founding, CMLabs has received positive recognition. In only a few years, CMLabs successfully opened more than ten medical testing centers. The company’s outstanding business development and operational management are well respected within the industry. C-Bridge Capital is confident that its cooperation with CMLabs will allow CMLabs to lead the third-party medical testing industry for years to come.
Mr. Quanyuan ZHANG, Founding Managing Partner and General Manager of Huatai Ruihe Healthcare Industrial Fund, explained that although the number of independent medical labs has increased in recent years, there is still a shortage of clinical medical testing service providers. Thus, clinical medical testing service providers have great prospects. Mr. ZHANG remarked that CMLabs also has great potential for growth thanks to its management team’s insights, coordination, and business acumen. Huatai Ruihe Healthcare Industrial Fund endorses the CMLabs’ management team with Mr. GUO as Chairman and believes that the management team will support the company’s sustained growth as it serves as an industry leader. Huatai Ruihe Healthcare Industrial Fund is very selective when choosing its cooperation partners. Huatai Ruihe has provided capital and other resources to help its cooperation partners to increase value output and realize long-term growth. With the help of Huatai Securities, Huatai Ruihe Healthcare Industrial Fund can provide access to a large-scale financial holding platform that helps companies increase their valuation on the capital markets.
As “The ambition to trek a thousand miles is reflected in each stride of the trekker.” With this in mind, CMLabs is making great strides toward becoming the best third-party medical testing service provider in China so as to provide top-quality medical services for patients around the world.
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