China Digest: Genebox raises $14m; Matrix backs Chinese-style bakery brand

Source: Genebox's LinkedIn page

Chinese digital health platform Genebox and Chinese-style bakery brand Manman Yuanqi have secured early-stage funding to expand their operations in the country. 

Digital health platform Genebox raises $14m Series A round

Genebox has raised nearly 100 million yuan ($14.02 million) in a Series A round of financing led by Chinese private equity firm Centurium Capital, as the two-year-old digital health platform aims to become profitable by the end of 2019.

Genebox, founded in April 2018, operates as a digital health platform that offers personal genetic information services to customers in China. Based on genetic and health-related data, the company connects users with third-party suppliers to access personalized services in three major areas, namely medical examinations, medical insurance, and customized vitamin products.

The company, with nearly 60 employees, aims to become profitable by the end of 2019, said Daniel Li Zhi, founder and CEO of Genebox, in an exclusive interview with DealStreetAsia on Wednesday.

The company currently generates about 80-90 per cent revenue from personal genetic information services. “To achieve profitability is not our main goal but proof that [the genetic testing business model] does have a market demand, and Genebox is satisfying the demand,” said Li.

The company will increase its investments in marketing and customer acquisition, focusing on expanding the user base to 100 million in 2020. The company currently serves about 100,000 to 200,000 customers.

“We captured an untapped market where an internal demand for personalized and customized healthcare management services emerged among Chinese customers, but no internet platform was actually satisfying such a demand,” said Li.

“[The Chinese genetic testing market] is still at a relatively early stage of development, in which the overall market demand is yet to be identified and commercialized,” said Li, adding that he currently does not see much competition in the market.

Upon the completion of the new round, the company will introduce online health data management services by encouraging users to sync their health data automatically recorded on mobile phones with the company’s app, which will help the firm deliver more value-added healthcare services.

Genebox closed an angel funding round worth 36 million yuan ($5.05 million) from Shanghai-listed pharmaceutical retailing business DaShenLin Pharmaceutical in November 2018.

Matrix Partners China injects $3m into Chinese-style bakery brand

Matrix Partners China has poured $3 million in a Series A round of financing in Manman Yuanqi, a Chinese-style bakery brand specialized in making date cake.

Manman Yuanqi, which literally means ‘filled with vitality’ in Chinese, was founded in 2017 to deliver Chinese-style bread and tea through an online platform and 40 brick-and-mortar stores in shopping malls and boutique supermarkets across Beijing and Shanghai. The company currently generates 10 per cent of its sales online.

Backed by Chinese-style restaurant chain Xibei, Manman Yuanqi is seeking to bring Chinese-style bakery products back to the market, where western bakery products have been playing a dominant role in the past years.

The market size of China’s baking industry has increased 33.5 per cent from 140.7 billion yuan ($19.72 billion) in 2013 to 187.8 billion yuan ($26.33 billion) in 2017, and is projected to have reached about 203.3 billion yuan ($28.50 billion) in 2018, according to Chinese industry research firm

Bakery products have become a primary breakfast choice for young customers whose preference for Chinese-style breakfast is also strong, said Matrix Partners China in a statement on its WeChat official account. The supply side of the market, however, is still occupied by western-style bakery brands with highly identical brand images and great reliance on additives.

“This is an opportunity for the rise of Chinese-style bakery chain brand,” said Han Lida, CEO of Manman Yuanqi.

The company will use the proceeds to enhance product quality and open up more offline stores. The firm also plans to explore business in second and third-tier cities after strengthening its capabilities in tier-one markets.