“Setting up a business is a romance between a group of people.” That at least is how Wang Jun sees it, having in January pinned the assertion onto his account with Weibo, China's equivalent to Twitter.
So the former chief executive and co-founder of Beijing Genomics Institute was presumably seeking to rekindle the magic when three months earlier he set up his own biotech firm – iCarbonX.
Wang, who spent 16 years at BGI and helped to establish the Chinese genome sequencing giant, is one of China's most renowned experts on genomics and life science.
Describing himself as a risk-taker, he told FinanceAsia in a interview about his ambition to build a digital-life, big data platform.
“We want to digitalise everyone’s life data in various aspects and stages. Then we use artificial intelligence [AI] to analyse the data and provide a system to help you manage your digital life,” Wang said. “If you want to run a marathon or climb Mount Everest, you don’t know how you will feel. You can let the digital form of you try first.”
Initially, over the next three to five years, iCarbonX will collect biological data such as DNA and proteins plus lifestyle and environmental information such as diet and air quality from one million willing participants.
The Shenzhen-based start-up's ultimate aim is to interpret all the data mined with AI and offer individuals tailored health management programmes and medical breakthroughs.
A climbing and basketball enthusiast, Wang, 40, co-founded iCarbonX in late October 2015. His biotech and IT-savvy partners included Li Yingrui, former chief scientist at BGI, and Li Hao and Wu Chun, who are best known for their respective tenures at China Unicom and Boston Consulting Group.
The name of the company, centred on the word “carbon”, alludes to the use of emerging new technologies to improve the quality of human life.
The nascent biotech firm soon drew attention from a few deep-pocketed domestic investors thanks to its advanced concept as well as its impressive array of founding members and strong track records. Official Chinese English-language newspaper China Daily even dubbed it “the next Google” of the biotech industry.
Already a unicorn
iCarbonX said in April it had raised Rmb1 billion ($150 million) from its maiden round of financing, valuing the start-up at about $1 billion, which means it took just six months for the firm to become a so-called unicorn, an unlisted company valued at $1 billion or more.
Tencent, the Chinese internet giant behind popular messaging app WeChat and internet portal QQ, led the series-A round of fundraising, alongside other investors including Shanghai-listed cell and gene firm Vcanbio Cell & Gene Engineering Corporation.
“Tencent made the decision very quickly,” Wang said of the deal, which he said came about because of the many close personal relationships between executives of the two companies and because Tencent has “long been keen to move into the digital healthcare business".
The internet titan’s chairman Pony Ma, fourth on the latest Hurun Rich List with a personal wealth of Rmb120 billion ($18 billion), even attended the opening ceremony of iCarbonX, the start-up’s website shows.
Teaming up with Tencent potentially offers iCarbonX both financial and strategic support, upon which iCarbonX could rely for data collection and marketing, according Wang and other investors.
Cai Cong, a managing partner at Share Capital, a Shenzhen-based venture capital firm, said Tencent’s willingness to bankroll the firm helped persuade his firm to commit Rmb430 million, in spite of iCarbonX’s “high valuation”.
“iCarbonX is very expensive indeed. But I’m not afraid of investing in an expensive project but rather of investing in a bad one,” Cai told FinanceAsia.
"Having Tencent as a strategic investor could help iCarbon access the data of Tencent’s WeChat and QQ," he added.
As of the end of 2015, WeChat had about 700 million users worldwide while QQ had 853 million, according to Tencent.
Costly
Implementing Wang’s ambitious and visionary plan is likely to be costly. According to him, mining data from 1 million people would possibly cost Rmb10 billion, which means iCarbonX will look to raise additional capital in the coming years.
Wang Jun, founder and chief executive of iCarbonX, speaks at the World Economic Forum in Tianjin (Photo credit: WEF)
The firm’s latest fundraising comes at a time when China’s life science and biotech industry has already undergone significant change, from mass-producing cheap copycat drugs to developing innovative new products and services, with growing support and understanding from the government and financial community.
Healthcare expenditure accounted for just 5.5% of Chinese GDP in 2014, compared with 17.1% and 11.5%, respectively, in the US and France, according to the World Bank. But Beijing is stepping up efforts to overhaul it nationwide.
State spending is set to hit $1 trillion in 2020, up from $357 billion in 2011, making China the second-largest healthcare market globally after America’s, according to McKinsey. Meanwhile, the output of China’s bio-related industry rose more than 20% in value to Rmb3.16 trillion ($480 billion) in 2014, reported the official Xinhua News Agency.
“The life science industry used to be more about either new drugs or new devices in China. It didn’t integrate closely into big data or AI. The integration has just started,” said Kevin Chen, a partner at Sequoia Capital China who focuses on healthcare investment.
With pinpoint analysis arrived at with the help of artificial intelligence, cancer patients, for example, could have more optimised and precise treatment plans, instead of mainly relying on the accumulated know-how of human specialists.
“100 doctors could have 100 different treatment plans. Sometimes a patient’s fate is up to the doctor’s experience, which isn’t scientific,” Chen told FinanceAsia
The bespoke healthcare market that could open up as advances are made in genetics and AI is an increasingly exciting and crowded area.
Before iCarbon opened its doors, BGI, co-founded by Wang 1999, was already exploring how genetic research could potentially transform the country’s underdeveloped healthcare sector.
BGI in March completed the first part of its “Three Million Genomes Project”, which it launched in 2011 to sequence the DNA of one million people, one million micro-organisms, and one million plants and animals. The work could help to prevent birth defects and diagnose orphan diseases based on findings, according to the company.
For Wang, who participated in the Human Genome Project at the age of 22 and spent 16 years sequencing and analysing the genetic makeup of living creatures including pandas and cucumber at BGI, genomics itself isn’t able to unlock all the puzzles of human health and longevity.
“It’s not just limited to genomics. You could also build a mature business model in the field of digital life and AI capacities,” said Wang, who attended the prestigious Peking University at 16 to study AI and later obtained his PhD in genomics.
Beauty, global ambition
iCarbonX plans to tap into the beauty industry first, as its research and development cycle is relatively shorter and poor quality or even fake products are still a headache across the country’s e-commerce platform.
By the end of this year, it aims to launch data-driven, personalised services for individual skin care.
Apart from working with a number of Chinese pharmaceutical firms, hospitals, medical research institutions, insurers, and healthcare service providers, the company has also set its sights abroad, where it eventually hopes to generate half of its revenue.
In February, iCarbonX established its first overseas branch in Malta, a southern European island country whose health system in 2000 was ranked fifth in the world by the World Health Organisation and which Wang hopes will be an abundant source of hospital data.
Wang is clearly thinking big.
Already, iCarbonX has developed into a 100-person team with an average age of 30.
“I’m always curious about the unknown world in life science and want to explore it," Wang told FinanceAsia. "Now we have a group of people who work together for the common goal. Isn’t it very romantic?”
