Billion Dollar Unicorns: Ping An Good Doctor Is Largest Chinese Healthcare Unicorn

A report by HSBC published last year estimates the online to offline (O2O) market in China to be worth more than $150 billion in size. The online segment of this market grew 80% during the first half of last year to $47 billion. The market is expected to continue to have a strong growth opportunity. China’s Ping An Good Doctor has made a mark in the healthcare O2O market and is a new entrant to the Billion Dollar Unicorn club.

Ping An Good Doctor’s Offerings

Shanghai-based Ping An Haoyisheng was founded in April 2015 by Chinese insurance company Ping An Insurance, which is led by Wang Tao. The word Haoyisheng translates to Good Doctor. The insurance company set up the service as part of its foray into the O2O space. The service provides its subscribers with access to a 24-hour one-on-one consultation from full-time specialists in all medical divisions. Subscribers are able to get a quick diagnosis and treatment and book online appointments with doctors. Additionally, they can then get prescriptions filled and purchase other healthcare products.

Since its founding, the app has gathered over 77 million registered users and claims to deliver more than 250,000 consultations daily. At the end of last year, the service had tie-ups with over 1000 full-time medical professionals and with 50,000 doctors to provide expert guidance to the subscribers. The company is planning to grow to 300 million-500 million users by the year 2019.

Ping An Good Doctor’s Financials

The revenue model for Ping An Good Doctor is not clearly known. But according to market reports, it earned RMB 300 million (~$45.1 million) in revenues in 2015. Recently Ping An Good Doctor raised its first round of venture funding. Last month, the company raised $500 million in a round led by international private equity funds and Chinese state-owned enterprises at a valuation of $3 billion. Details of the investors were not disclosed.

According to a BCG research, China’s digital healthcare spending is estimated to grow to $110 billion by the year 2020. The analyst estimates healthcare services related spending to account for $95 billion and the remaining $15 billion to be driven by e-commerce related transactions in the industry.

Besides Ping An Good Doctor, other companies are also counting on expanding their online presence in the sector. Guahao.com, an online doctor appointment website, has the backing of Tencent and links to 100,000 Chinese doctors and 37 million users. Alibaba also has a healthcare subsidiary Ali Health, which has a mobile presence and aims at allowing patients to be able to simply pick up their phones to interact with a doctor.

But Ping An Good Doctor’s recent valuation has broken a few records. The last round of funding was the largest amount of fundraising in a single round by an online healthcare startup all over the world, and this was the maximum estimated value after an A round of financing, making it the largest Chinese healthcare unicorn. Its association with the Ping An Insurance company is obviously of use as it is able to close the loop between medical service providers and the patients. It would be interesting to see how the valuation fares amid the recently imposed regulations by Chinese authorities on medical information available online.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Photo credit: Kate Ter Haar /Flickr.com

This segment is a part in the series : Billion Dollar Unicorns