Anew Labs raises $290 million for AI drug discovery following ByteDance spin-off

Anew Labs, a Shanghai-based artificial intelligence drug discovery unit recently spun off from ByteDance, has completed a $290 million fundraising round. The financing gives the independent company a valuation of approximately $1.5 billion.

The funding round was led by HSG (formerly Sequoia China), IDG Capital, and Hillhouse Investment, with 5Y Capital participating as a co-lead. Other investors included Gaorong Ventures, Primavera Venture Partners, Boyu Capital, SBP Group, and the state-backed Shanghai Future Industries Fund.

This capital injection coincides with a broader trend in China where biotech stocks are emerging as a significant AI-driven trade. The Hang Seng Biotech Index has risen nearly 22% this quarter, as investors anticipate that AI will reduce timelines and costs in pharmaceutical research and development. Analysts note that several Chinese leaders in the AI-driven drug discovery sector are already profitable and trading at discounts compared to their US peers.