Alibaba Founder Invests Big Money in Medtech Firm

The cofounder of Chinese e-commerce giant Alibaba plans to invest the equivalent of $142 million in a Chinese medical imaging device manufacturer, according to a report in Forbes Asia.

Nancy Crotti

Private fund Yunfeng Capital, established by Alibaba's Jack Ma and other investors, will put 880 million yuan into Beijing-based China Resources Wandong Medical Equipment, the Forbes Asia story said. A June 5 company filing revealed that Yunfeng has agreed to spend 200 million yuan ($32 million) to purchase 5.7 million shares of China Resources through a private placement, giving it a for a 2.35% stake in the company.

According to Forbes Asia, the filing further says that Wandong and Alibaba's publicly traded healthcare unit Alijk will jointly provide Internet-based medical imaging services, and that Wandong will provide readings of patients' MRI and CT scans to Alibaba's online healthcare platform, Yigedu.

While involving large sums, the investments should not be a surprise. In April, Forbes Asia said, Wandong's controlling shareholder signed a three-year agreement with Alijk to look for opportunities to invest in medtech and medical resource management.

To cite another example of an Asian firm investing in the burgeoning Chinese market, Taiwanese company Foxconn (Taipei) is working with Varian Medical Systems (Palo Alto, CA) to distribute that company's radiation therapy technology in China.

Foxconn, which received widespread media attention in 2012 for mistreating workers, became a part owner of remote patient monitoring firm Sotera Wireless (San Diego) last year. Under the deal, Foxconn would manufacture sensors and batteries for Sotera's ViSi Mobile technology while also distributing the technology in China. Though the monitor manufactured in the United States, Sotera may ultimately turn have Foxconn make the products in Asia, the Wall Street Journal reported.

China has one of the fastest-growing medical device markets in the world, according to a report by Business Monitor International. Its huge population offers tremendous potential to medtech companies, the organization said.

Research and Markets estimated that China's med tech market would grow to 419 billion yuan, or $67.6 billion by 2020.

China's health ministry wants to promote the use of Chinese-made medical equipment to cut reliance on imports and reduce healthcare costs.

Nancy Crotti is a contributor to Qmed and MPMN.

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