Healthcare-focused investment firm HM Capital has closed its maiden USD-denominated venture capital fund at $100 million to back disruptive early-to-mid-stage firms in the sector.
The firm hit the first close of the vehicle in April 2021.
In January 2024, HM Capital sealed its RMB-denominated venture capital fund at 1.5 billion yuan ($210.7 million) to back early-stage healthcare startups.
The firm targets investments in “chuhai” – a term that refers to the phenomenon of Chinese entrepreneurs setting up companies outside of China. The firm will invest in Chinese companies located within the country and overseas as well as support firms to expand beyond the country, the company said on Thursday.
The firm is focused on niche spaces such as biopharma, medical devices, medical and healthcare services.
So far, the fund has invested in nine firms including US-based Osteal Therapeutics, a clinical-stage biopharma firm developing combination therapies for musculoskeletal infections; OncoC4, a developer of novel biologicals for cancer treatment; and Singapore-based KBP Biosciences, which develops and commercializes innovative small-molecule therapeutics for cardiorenal and infectious diseases with large unmet medical needs.
The fund exited KBP Biosciences after Danish multinational Novo Nordisk acquired ocedurenone – an orally administered, small molecule, non-steroidal mineralocorticoid receptor antagonist (nsMRA) – with potential application in cardiovascular and kidney diseases, from the former for up to $1.3 billion in October 2023.
HM Capital, which officially started investments and operations in July 2019, leverages the resources and network of HM Healthcare Management Services (Huimei Healthcare), a healthcare management firm set up by Asian private equity giant Hillhouse Capital Group and US-based non-profit medical center Mayo Clinic in January 2015.
The recent fund close comes at a time when capital inflows into the US biopharmaceutical sector are showing signs of recovery, with several Chinese scientists-founded innovative drug developers taking their businesses to Nasdaq, the release noted.
At a time when many Chinese internet firms are opting to fundraise via the issuance of convertible bonds thanks to the cheaper financing costs, Robert Luo, founding and managing partner of HM Capital, who also goes by his Chinese name Luo Rushu, said the firm also leverages the financing instrument to achieve target internal rate of return (IRR) as part of its investment strategies to generate strong liquidity.
