Morning Star Portfolio Company "Nuoxin Chuanglian" Closes New 200 Million Yuan Funding Round | Light Moments

Recently, Beijing Nuoxin Chuanglian Technology announced the completion of a new RMB 200 million funding round, led by HSG with continued participation from existing investors Matrix Partners China, Zhichun Capital, 5Y Capital, Volcanics Venture, China Creation Ventures, and FreeS Fund.

Xutian Jing, Executive Director at 5Y Capital, commented: "In the six months since 5Y Capital invested in Nuoxin Chuanglian, we have been delighted to witness the company's rapid business growth and the completion of this new funding round. 5Y Capital has also continued to oversubscribe in this round. Against the backdrop of national policies such as drug 'consistency evaluation' and 'volume-based procurement,' the marginal returns of traditional pharmaceutical sales methods have dropped sharply. The market needs more cost-effective marketing and service solutions to empower drug companies to continuously improve drug accessibility for hospitals and patients in China. Nuoxin Chuanglian has built an infrastructure network for pharmaceutical marketing through technological and intensive means, which can effectively reduce sales costs for drug companies, strengthen compliant and professional connections between drug companies and doctors, and improve drug accessibility. The Nuoxin Chuanglian team has a strong IT and internet DNA. We believe that the technology-empowered pharmaceutical sales industry will become increasingly efficient, enabling healthier development of China's pharmaceutical market."

This round comes less than six months after Nuoxin Chuanglian's previous funding, marking the company's third financing within a year. Founder Wei Ruan stated that the proceeds will be used primarily for business expansion, technology investment, and solution optimization.

Nuoxin Chuanglian is a leading pharmaceutical digital marketing company in China. Based on globally leading semantic understanding and deep learning algorithms, the company has independently developed an intelligent business operations platform that integrates into core business processes of pharmaceutical companies, streamlining both internal and external drug promotion workflows. This helps drug companies improve operational efficiency while maintaining compliance, achieving greater drug accessibility.

In 2020, Nuoxin Chuanglian's core business maintained hypergrowth exceeding 500%, with solutions covering 100 drug types, over 200,000 highly active doctors, and contract revenue surpassing RMB 100 million.

Since its founding, Nuoxin Chuanglian has focused on providing digital marketing solutions for pharmaceutical companies. On the drug company side, Nuoxin Chuanglian applies "data analysis/management tools/business consulting + execution" to pharmaceutical enterprises, using leading AI technology to deliver more precise online promotion solutions. The company is committed to helping drug companies transform traditional pharmaceutical promotion models and establish compliant, efficient digital systems. On the physician side, Nuoxin Chuanglian provides doctors at all levels with quality information resources and services, helping clinicians access professional information and use professional tools more efficiently and conveniently, thereby improving their clinical practice. On the patient side, Nuoxin Chuanglian provides a platform for patient-doctor interaction, helping both parties achieve chronic disease management and improve patients' quality of life.

Currently, China's pharmaceutical industry is undergoing reform. Sustained healthcare reform has brought enormous variables and opportunities to the market. In this uncertain environment, Nuoxin Chuanglian leverages its technological advantages to align with healthcare reform directions, gain deep insights into the needs of drug companies and doctors, and use new technologies and tools to significantly improve efficiency in the pharmaceutical marketing industry. The company connects the vast pharmaceutical promotion and sales market with millions of medical institutions and doctors, shifting drug company marketing scenarios from traditional offline to online channels to achieve more precise, lower-cost, and more transparent and compliant drug promotion. Nuoxin Chuanglian itself has developed a dual-wheel-driven business model.

1

Helping Grassroots Doctors Improve Clinical Practice

The government's tiered diagnosis and treatment policy aims to ensure that serious illnesses are treated without leaving the county, with 90% of patients remaining within county-level medical institutions for diagnosis and treatment. County hospitals in China serve a population exceeding 900 million, accounting for over 90% of all residents, indicating tremendous growth potential in the grassroots market.

Despite this potential, grassroots medical standards remain relatively low, grassroots patients are highly price-sensitive, and grassroots medical institutions are small in scale, widely distributed, and distant from each other. These factors have historically been the main reasons multinational pharmaceutical companies have neglected the grassroots medical market. As healthcare policies continue to tilt toward grassroots markets,下沉基层 (going down to grassroots levels) has become an important strategy for multinational drug companies. Pharmaceutical companies need to invest more human and financial resources in grassroots medical market education.

In real clinical scenarios, due to significant individual differences among patients, doctors' needs are relatively personalized, and the problems they need to solve are more diverse. Drug companies and doctors actually need to establish a two-way dialogue mechanism based on more advanced technology and platforms — on one hand achieving precise matching of value between both parties, and on the other hand quickly meeting the diverse needs of grassroots doctors. Technology and algorithms are key to solving these problems, helping doctors more efficiently gain thorough understanding of drugs, thereby improving clinical capabilities and better serving patients. For doctors, through Nuoxin Chuanglian's tool — Nuoxin Academy (mini program) — they can autonomously ask questions and obtain information about prescription drugs in various aspects, including physicochemical properties, adverse reactions, case studies, and disease-related information such as diagnostic methods, symptoms, treatment approaches, and drug administration methods (first-line therapy, second-line options, combination regimens, etc.), meeting their daily prescribing needs. Additionally, doctors can exchange and discuss in the community, enhancing their professional expertise, all of which increases their stickiness to the platform.

2

Building a Compliant and Transparent Promotion Network

Making Affordable Drugs Accessible to Ordinary People

With the deepening of healthcare reform, higher medical service quality, broader medical accessibility, and more inclusive payment have become the direction of reform. Among these, compressing drug distribution links and curbing inflated drug prices has become an unstoppable trend, as evidenced by national policies in recent years such as the two-invoice system, consistency evaluation, and volume-based procurement.

Wei Ruan stated: "Although the process has been incredibly difficult, the results prove that doing what is correct in the long-term trend will ultimately be validated in value, as long as you persist. We believe that taking medicine can definitely become both accessible and professional — this is the long-term major trend in the pharmaceutical distribution field. Therefore, moving in the policy direction of making drugs as affordable as possible is going with the flow."

Around reducing drug prices, there can be many approaches, with the most core element being the efficiency of value matching. This is especially true in two-sided markets.

Traditional pharmaceutical representatives influencing physician prescribing through "cash-for-prescription" sales is clearly contrary to the trend. It adds distribution links and increases monetary investment, which ultimately gets reflected in drug prices and borne by end consumers — the patients.

Nuoxin Chuanglian has created a direct online channel connecting pharmaceutical companies with doctors, capable of improving value matching efficiency.

Wei Ruan also candidly admitted: "Along the way, it has been extremely difficult because the existing interest chains are too entrenched. The main reason Nuoxin Chuanglian has been able to persist to the stage of market recognition is the boost from healthcare reform policies over the past five years."

On one hand, policies targeting drug companies such as separation of medicine and medical care, the two-invoice system, and volume-based procurement have continuously squeezed profit margins in drug distribution, while effectively lowering drug prices and substantially reducing drug company revenues and profits. Therefore, in the存量市场 (stock market/existing market), drug companies need more efficient, lower-cost promotion methods and channels for physician education. Nuoxin Chuanglian, with its years of deep industry expertise, has naturally become one of the choices.

On the other hand, as the tiered diagnosis and treatment policy targeting patients and doctors begins to show results, the下沉市场 (downward/sinking market) has become a new battlefield for pharmaceutical companies. Faced with the庞大、分散 (massive and fragmented) nature of this incremental market, it is difficult for any single drug company to achieve complete coverage, giving enormous opportunity to Nuoxin Chuanglian's business model of building bridges between doctors and pharmaceutical companies.

Furthermore, driven by policies promoting domestic substitution in pharmaceutical innovation, new drug R&D companies have risen and urgently need to educate the market to win development space. This also represents a new opportunity for Nuoxin Chuanglian to expand its boundaries.

The ability to complete three funding rounds within a year and gain recognition from multiple well-known investment institutions stems not only from Nuoxin Chuanglian's first-mover advantage in the market and deep technology reserves, but also from its diverse and innovative team, which represents significant value.

Nuoxin Chuanglian's executive team comes from multiple well-known companies both within and outside the industry, making it a true "crossover combination." The team emphasizes technology-driven development, with over half of employees being technical staff, many from leading internet companies such as Alibaba, JD.com, Baidu, ByteDance, and Meituan. "Energetic, courageous, and innovative" are the most distinctive labels of the Nuoxin Chuanglian team.

Nuoxin Chuanglian aspires to become a company truly driven by technology and products, continuously innovating. In the wave of healthcare system reform, it aims to serve business with technology, improve overall industry efficiency with data and technology, meet doctors' needs to enhance clinical practice, help patients live more fulfilling lives, and contribute its share to China's pharmaceutical reform cause.

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5Y Capital is one of China's earliest venture capital institutions focused on early-stage investment, currently managing both USD and RMB dual-currency funds with assets under management totaling approximately several billion dollars. Its limited partners include internationally renowned sovereign wealth funds, family offices, fund-of-funds, and university endowments.

Having worked together for nearly two decades, the 5Y Capital team seeks out, supports, and inspires entrepreneurs who dare to stand alone, sharing their exceptional vision while providing our insights, industry experience, and support across all operational aspects of entrepreneurship — from the spiritual to the practical.

5Y Capital's successful investments include Sohu (NASDAQ: SOHU), Trip.com Group (NASDAQ: CTRP), The9 (NASDAQ: NCTY), China Distance Education Holdings (NYSE: DL), Focus Media (formerly Jumbo Media, SZ: 002027), Xunlei (NASDAQ: XNET), Phoenix New Media (NYSE: FENG), UCWeb (acquired by Alibaba, NYSE: BABA), JOYY (NASDAQ: YY), Didi Dache (merged into DiDi), Musical.ly (acquired by ByteDance), NYSE: ZEPP (NYSE: HMI), OneSmart International Education (NYSE: ONE), Huya (NYSE: HUYA), Xiaomi (HK: 0181), Viomi (NASDAQ: VIOT), Kingsoft Office (688111.SH), Lizhi (NASDAQ: LIZI.US), Agora (NASDAQ: API), and Xpeng Motors (NYSE: XPEV). The portfolio also includes rapidly growing excellent enterprises such as Kuaishou, WeDoctor, SenseTime, SouChe, Horizon Robotics, Bigo, Aihuishou, Xiaozhu, Maimai, Zhimi, Pony.AI, and Keep.