The round

Anew Labs, the AI drug discovery unit ByteDance has spun out, has raised $290m in its first round of outside funding, according to PEdaily, a Chinese venture capital publication, and to Reuters.

Reuters, citing two people familiar with the matter, reported that the round values Anew Labs at $1.5bn and that ByteDance, the owner of TikTok, keeps 56% of the company, The Next Web reports. Neither figure has been confirmed by the companies.

HSG, the firm formerly known as Sequoia China, led the round with IDG Capital and Hillhouse Investment, with 5Y Capital as co-lead. Gaorong Ventures, Primavera Venture Partners, Boyu Capital and the state-backed Shanghai Future Industries Fund also took part, and SBP Group joined as a strategic investor.

An abstract rendering of particles forming a human figure
The unit has four drug candidates and no approved medicines. Illustrative image. Marek Piwnicki · pexels · Pexels License

What Anew Labs does

The unit has developed structure-prediction and protein-design models, including Protenix and PXDesign, and has four drug candidates, none of them approved. One is an AI-designed IL-17 inhibitor that the team presented at the American Association of Immunologists’ meeting in Boston in April.

According to earlier reporting by 36Kr’s Intelligent Emergence, about 50 core staff moved to the new company along with its algorithms, technology platform and pipeline assets, and ByteDance’s cloud arm Volcano Engine will keep supplying its computing power. The company has operations in Shanghai, Singapore and San Jose, California. It is led by Liu Kai, who worked in venture capital at IDG Capital, now one of the round’s lead investors, before joining ByteDance in 2021.

Reuters’ sources said the spin-off was meant to support the unit’s long-term development, because drug discovery follows a different industry logic and management approach from ByteDance’s other businesses.

The Shanghai skyline
Anew Labs has operations in Shanghai, Singapore and San Jose. Illustrative image. 勇 方 · pexels · Pexels License

Why it matters

The round puts a price on one of the Chinese technology industry’s larger bets on AI for science, and gives ByteDance outside partners for a business that will take years to produce revenue. Drug discovery is a long road: the test for Anew Labs is whether its candidates reach and clear clinical trials.