WeDoctor Considers Listing a Spinoff on New Tech Board

(Bloomberg) -- WeDoctor, one of China’s biggest online health-care startups, is considering spinning off a major slice of its business and listing it on the country’s soon-to-created technology board, according to people familiar with the matter.

WeDoctor is weighing a listing of at least part of its cloud-services arm amid a broader restructuring, the people said, requesting not to be named because the matter is private. That division amasses sensitive personal data by serving local governments and hospitals, and Beijing prefers to keep information related to that business in-country, the people said. The spinoff would join the first batch of companies on the much-anticipated tech bourse, intended to help innovative enterprises secure capital at home rather than abroad.

Backed by Tencent Holdings Ltd., WeDoctor joins a growing contingent of tech giants hoping to uproot a health-care industry that’s been largely impervious to online disruption. The startup, whose business spans insurance policies to appointment-booking and physical clinics, is trying to unclog bottlenecks in a Chinese health-care market slated to hit 8 trillion yuan ($1.2 trillion) by 2020. It was last valued at $5.5 billion.

WeDoctor declined to comment in an emailed statement. The move is still under discussion and its plans could change, the people said.

While China has some of the world’s biggest technology companies, many from Alibaba Group Holding Ltd. to Tencent are listed in the U.S. or Hong Kong. The new science and technology board of the Shanghai stock exchange is the brainchild of Xi Jinping, who unveiled the concept in November. Regulators see it as a way to keep the country’s most promising companies from going public abroad.

Beijing however has a patchy track record with attempts to entice the nation’s tech champions. An effort to lure companies back with so-called Chinese depositary receipts, which would allow domestic investors to hold stakes in overseas-listed Chinese companies, petered out rapidly.

With the new board, companies could face laxer listing rules compared with existing exchanges, a boon to tech startups that have racked up losses in the pursuit of growth. Venture capital house Zhenfund said in November that as many as 10 of its portfolio companies could head for the board.

It’s unclear when it will open for business. Shanghai’s exchange has held numerous meetings this year with executives from more than 100 brokerages and investment houses to solicit feedback on final rules.

WeDoctor’s proposed move doesn’t preclude the startup from considering alternative venues if the need arises. It had earlier acquired or invested in a slew of in-vitro fertilization companies from Australia and Hong Kong to mainland China, including Genea and BBlink. It’s now consolidating those businesses and may also try to spin off that entity in the U.S., according to one person familiar with the matter.

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