Private equity and venture firm Legend Capital has led a 120 million yuan ($17 million; €16 million) funding round in Chinese beauty company PhiSkin, a portfolio company of pan-Asian investment firm H&Q Asia Pacific.
Legend Capital invested from its healthcare-focused fund, 2016-vintage LC Healthcare Fund I, which closed on $250 million.
Ares Management also participated in the round via its first ever yuan-denominated fund.
Shanghai-based PhiSkin is a medical aesthetic chain that offers botox procedures, laser treatments, double eyelids surgery, as well as other non-surgical beauty treatments. The company, which has clinics and beauty centres in Shanghai, Beijing, Ningbo and Hangzhou, plans to open another three centres by the end of 2017. It also expects to launch various education training programmes for aesthetic medicine in the country.
H&QAP invested $10 million for a more than 60 percent in the company in 2014. Following the latest investment round, the firm remains the largest shareholder in the company, owning roughly a quarter of PhiSkin.
“There’s a lot of strategic relationships Legend and Ares can bring in but the most important thing would be an exit strategy in the next three years, which will most likely focus on an onshore listing,” H&QAP managing director Mark Hsu told Private Equity International.
When asked about PhiSkin’s future plans, Hsu said the company is expecting the natural expansion of the business, both in terms of geographic expansion as well as into different product lines including private label branded products.
“The biggest challenge in geographic expansion is getting licences especially in China. One of the key things we look for with Legend and Ares is their regulatory relationships and their assistance with the licence process,” Hsu said
Under its ownership, H&QAP established PhiSkin as a leading training facility and education in aesthetics. The firm also hired former Sephora China CEO Catherine Kang to join the company in 2015. Under Kang, the company brought in high quality dermatologists and imported medical devices with latest cutting edge technology from overseas to provide the best service to Chinese customers. Over a period of two years, the company has grown from one to seven clinics across China, with revenue of over 60 million yuan.
H&Q AP currently manages four to five pan-Asian funds focused on the cross-border theme. The firm has managed over $3.5 billion in committed capital across 28 funds since inception in 1985. Healthcare is a major focus for the firm, with favoured areas of investment including innovative drug companies, medical devices and medical technology.
The firm is also in the process of teaming up with a Chinese healthcare group to launch a 1 billion yuan healthcare-focused fund.