Chinese venture capital investment into US biotech companies in the first half has already surpassed the record set for the whole of last year, underlining Beijing’s focus on medicine as a strategic sector — a development that has flown under the radar of regulators in Washington.
Chinese funds participated in investment rounds in US biotech companies worth $5.1bn in the first half of this year, beating the $4bn in 2017, the first year of large Chinese inflows into the sector, according to Seattle-based data provider PitchBook. “We’ve seen tremendous growth,” said Kitty Lee, a partner at consultancy Oliver Wyman. “You can’t forget how much the Chinese government is pushing biotech as a strategic industry and trying to build up the industry to become competitive globally.
A natural part of that is investing.” China is now a significant source of funds for US biotech start-ups. Such companies raised about $10bn in VC funding last year, according to PitchBook, meaning Chinese investors participated in about a third of rounds by value.
For instance, California blood-testing company Grail raised $300m in May from a consortium of greater China-based funds, including Ally Bridge Group, China Merchant Securities International, HuangPu River Capital and ICBC International.
“American companies usually have obvious advantages in terms of cutting-edge innovation, originality and IP,” said Frank Yu, founder of Hong Kong-based Ally Bridge. “We also help bring some the technologies we have invested in overseas back to China”.
