ByteDance acquires private hospital chain

ByteDance’s healthcare unit in China, Xiaohe Health

Hey Everyone,

TikTok parent company ByteDance just did an Amazon move. , ByteDance’s healthcare unit in China, Xiaohe Health, has acquired a high-end healthcare organization called Amcare Healthcare for $1.5 billion.

Amazon recently acquired One Medical for $3.9 billion.

Amcare Healthcare was founded in Beijing in 2006 and it offers medical services like maternity care, women’s health and pediatrics.

TikTok’s parent company ByteDance is making some pretty heavy bets on the healthcare space as it acquired Amcare, which runs high-end children’s and women’s hospitals across China. This as BigTech companies like Google, Apple, Amazon and Microsoft pivot and make bets on the future of healthcare.

Amcare Healthcare was founded in Beijing in 2006 and it offers medical services like maternity care, women’s health and pediatrics. It also operates Amcare Women’s & Children’s Hospital, which is the main brand of Amcare Healthcare in China.

In recent months, the market cap of ByteDance has dipped below $300 Billion with a crisis in one of its investors SoftBank, eve as it cuts its stake in Alibaba. ByteDance is financially backed by Kohlberg Kravis Roberts, SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group. In recent years ByteDance has emerged as the global leader in consumer app development and consumer app A.I.

According to TechCrunch, Amcare’s expertise also seems tangential to ByteDance’s main business of a content machine that churns out snappy, addictive videos. ByteDance is more than just an advertising power-house however. It’s not uncommon, however, to see internet giants in both China and the U.S. dabbling in the healthcare sphere as part of their diversification strategy when they’ve got the capital and user base to tap.

ByteDance is stealing ad-share from Alibaba, disrupting mobile search from Baidu and competing against Tencent in a variety of ways. Tencent has tried opening brick-and-mortar clinics. Alibaba and JD.com run online pharmacies. The BAT companies are as interested in healthcare in China, as BigTech in the U.S. is slowing creating empires that will disrupt healthcare.

SCMP reported the news up to five business days before it hit the western media. While expats are leaving China in an exodus due to the Shanghai lockdowns among other reasons, ByteDance in June acquired Beijing-based Amcare, which runs eight hospitals across four Chinese cities, targeting expats and high-income locals. Coco Feng tells us that The TikTok owner’s healthcare arm currently runs an online medical consultation app, competing against similar offerings from Baidu, JD Health and others.

Amcare has also entered the IVF field. In 2020, it obtained a government license for in-vitro fertilization operations by acquiring a Beijing hospital. Prior to ByteDance’s takeover, its investors included Hillhouse Capital, China Renaissance and Warburg Pincus, according to Qichacha. For ByteDance, this is a relatively major acquisition.

I think we can surmise that ByteDance is on pace to become a biotech company as the TAM of the future of healthcare is just so massive. ByteDance’s foray into healthcare, at least on public record, started in 2020 when it bought a company that provided health information to the masses. ByteDance’s health business later came to be known as Xiaohe Health and its interest in the space is far-reaching, with a growing investment portfolio that includes a company that specializes in drug discovery and one that conducts DNA synthesis.

Eventually quantum computing startups will be consolidated and acquired by BigTech to fuel things like drug discovery and simulations in genomics, biotech and nano-medicine. This will potentially further the A.I. of healthcare movement. As Tech companies become more than Cloud, media and advertising companies, they will have roots into nearly every aspect of the lives of consumers.

ByteDance is among the most successful of post BAT companies showing China’s relentless emphasis on A.I., innovation and global expansion.

Thanks for reading!