Chai Xiangfei, founder of Chinese artificial intelligence startup HuiyiHuiying, is modest and painfully honest, something that is rare among Chinese entrepreneurs.
When asked about the future of applying AI technology to the healthcare sector, Chai did not talk about billion-dollar market potential. "I always tell my team that...the most important thing is who can survive longer. If one can survive for five years, he/she will be the winner," Chai told China Money Network in an interview in HuiyiHuiying's headquarters in Beijing last week.
The honesty may come from Chai's experience as a postdoctoral researcher at the Department of Radiation Oncology at Stanford University, as well as working at the Holland Cancer Research Center and the radiology department in Leuven University. Before founding the Beijing-based medical imaging AI startup in 2015, Chai had worked in fields that rely on precision and accuracy.
But venturing into the tech startup world in China for almost three years has altered Chai's mentality, for sure. "I changed from the mindset of an engineer and a scientist to a businesses person. Before, we only thought about the technology and products. But now the more important things are: How can you make money? Who are the real payers for your products?" Chai confessed.
This focus on the end user has led HuiyiHuiying to create products with maximum value potential. Since hospitals are the paying clients for HuiyiHuiying's medical imaging AI products in China, the company has focused on hospitals' needs on key diseases: major vascular diseases and cancers including breast cancer, lung cancer and liver cancer. These two types of diseases accounted for roughly 66% of the causes for death in China in 2016, the biggest killer diseases by a wide margin, according to the World Health Organization.
Because hospitals are organized around disease types, HuiyiHuiying has designed its products to assist single disease throughout the diagnosis and treatment process. In November, the company launched two full cycle health management platforms for breast cancer and cardiac diseases.
"Different hospitals always have different processes that need to be adjusted to. For some big customers, we always need to adjust, even the algorithms, to do the fine tuning," said Chai.
If the future is the survival of the fittest for healthcare AI startups, HuiyiHuiying is currently among the strongest in China. Last month, Intel Capital led a strategic investment round in the company, with participation from Beijing Singularity Power Investment Fund, a state-backed firm.
Even though the company did not disclose how much it raised, people with knowledge of the matter said it is around RMB200 million (US$29 million) to RMB300 million (US$43 million). In January this year, Chinese private equity firm CDH Investments invested an undisclosed amount in the company.
In Chai's own words, Chinese venture capital markets has cooled during the second half of 2018, even though "AI was still very hot" during the first half. To be able to secure financing in today's crucial environment is a testament of HuiyiHuiying's team, but also its intense focus on execution and business fundamentals.
Read an interview Q&A below. Also subscribe to China Money Podcast for free in the iTunes store, or subscribe to our weekly newsletter.
Below is an edited version of the interview.
Q: HuiyiHuiying last month raised strategic investments from Intel Capital and Beijing Singularity Power Investment Fund. Was it easy to close this funding round in the so-called "VC winter"?
A: The Chinese VC market, especially during the second half of 2018, fundraising has become more difficult in general, even for the AI industry. During the first half, fundraising in other industries was difficult but AI was still very hot.
I guess investors have become more selective in companies, with a stronger focus on if you have a viable business model,
