Yiyao \China

Yiyao was a Chinese healthcare platform that attempted to bridge the gap between patients and medical services through an online-to-offline (O2O) model. Launched in 2015 during China's digital health gold rush, Yiyao raised $200M to build a comprehensive ecosystem connecting patients with doctors, pharmacies, and healthcare providers. The platform offered telemedicine consultations, prescription fulfillment, health information, and appointment booking. The timing seemed perfect: China's healthcare system was notoriously fragmented, with patients facing long wait times, limited access to quality doctors, and opaque pricing. Yiyao positioned itself as the 'super app' for healthcare, attempting to digitize the entire patient journey from symptom search to prescription pickup. However, the company faced brutal unit economics in a market where patients expected free consultations, doctors were reluctant to engage outside hospital systems, and regulatory uncertainty around online prescriptions created operational chaos. Despite massive funding, Yiyao burned through capital trying to subsidize both supply (doctors) and demand (patients) while competing against better-capitalized rivals like Ping An Good Doctor and Ali Health. The company's hybrid model—neither pure marketplace nor integrated provider—left it vulnerable to platform giants who could absorb losses indefinitely while building healthcare as a loss-leader for broader ecosystems.

SECTOR Health Care
PRODUCT TYPE Marketplace
TOTAL CASH BURNED $200.0M
FOUNDING YEAR 2015
END YEAR 2024

Discover the reason behind the shutdown and the market before & today

Failure Analysis

Failure Analysis

Yiyao died from a toxic combination of unsustainable unit economics and strategic misalignment in a winner-take-all market. The core problem was attempting to build...

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Market Analysis

Market Analysis

The Chinese digital health market in 2024 is a consolidated oligopoly dominated by three ecosystem players: Ping An Good Doctor (market cap ~$3B, 400M+...

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Startup Learnings

Startup Learnings

Healthcare marketplaces require structural advantages beyond product: Yiyao proved that even $200M and decent execution can't overcome ecosystem disadvantages. Modern founders should only enter...

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Market Potential

Market Potential

China's digital health market is massive and growing. The TAM in 2015 was estimated at $50B+ and has since exploded to over $200B as...

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Difficulty

Difficulty

Building a healthcare marketplace in 2015 required massive infrastructure: doctor credentialing systems, HIPAA-equivalent compliance, payment processing, logistics for prescription delivery, and complex integrations with...

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Scalability

Scalability

Healthcare marketplaces have notoriously poor scalability due to supply-side constraints and high variable costs. Yiyao's model required continuous subsidies to both doctors (to participate)...

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Rebuild & monetization strategy: Resurrect the company

Pivot Concept

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AI-native chronic disease management platform for China's 130M diabetes patients, combining continuous glucose monitoring (CGM) data, LLM-powered health coaching, and outcome-based reimbursement contracts with insurers. Unlike Yiyao's horizontal marketplace, ChronicCare focuses exclusively on diabetes management—a $50B+ market in China with clear clinical outcomes (HbA1c reduction) and strong insurer willingness to pay. The platform uses AI to deliver 90% of daily coaching (meal planning, medication reminders, exercise guidance) at near-zero marginal cost, escalating to human endocrinologists only for complex cases or emergencies. Revenue comes from B2B2C contracts with insurers and employers (who pay $200-400/patient/year for proven HbA1c reduction) rather than consumer subscriptions. The wedge is partnering with CGM device manufacturers (Abbott, Dexcom entering China) to bundle software with hardware, creating a Peloton-like model where the device is the acquisition channel and software is the retention/monetization engine.

Suggested Technologies

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OpenAI GPT-4 or Alibaba Qwen for conversational health coaching (fine-tuned on diabetes management protocols)LangChain for agentic workflows (meal planning, medication interaction checks, appointment scheduling)Supabase for patient data storage with China-compliant local hostingReact Native for cross-platform mobile app (iOS/Android)Python FastAPI backend for CGM data ingestion and real-time analyticsTemporal for workflow orchestration (medication reminders, doctor escalations)Mixpanel for behavioral analytics and engagement trackingStripe/Alipay for payment processingTwilio/Agora for video consultations with endocrinologistsRetool for internal dashboards (doctor portal, insurer reporting)

Execution Plan

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Phase 1

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Step 1 (Wedge): Partner with one CGM device distributor in China to bundle ChronicCare AI as a 3-month free trial with device purchase. Target 1,000 patients in Shenzhen/Shanghai through endocrinology clinics. Build core AI coach handling meal logging, glucose pattern analysis, and medication reminders. Prove 0.5%+ HbA1c reduction in 90 days with <10% human doctor involvement. Cost: $150K (6 months, 3 engineers + 1 clinical advisor).

Phase 2

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Step 2 (Validation): Sign outcome-based pilot with one mid-size insurer (5,000 covered diabetics). Charge $15/patient/month with 50% bonus if cohort achieves >0.7% average HbA1c reduction. Expand AI capabilities: add exercise coaching, mental health check-ins (diabetes + depression comorbidity), and family caregiver portal. Integrate with China's national health insurance system for claims data. Target 80% patient retention at 6 months. Cost: $300K (6 months, scale to 8-person team).

Phase 3

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Step 3 (Growth): Launch employer wellness channel targeting China's 200M+ white-collar workers (high diabetes prevalence, strong employer health benefits). Offer $200/employee/year for comprehensive diabetes prevention + management. Build viral loop: patients who hit HbA1c goals get $50 credit toward CGM supplies, incentivizing adherence. Expand to 50,000 active patients across 3 provinces. Add AI-powered complication prediction (retinopathy, neuropathy risk scoring) to increase clinical value. Cost: $800K (12 months, 20-person team).

Phase 4

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Step 4 (Moat): Develop proprietary clinical dataset of 100K+ Chinese diabetic patients with longitudinal CGM + outcomes data—the largest in China. Use this to train specialized medical AI models that outperform generic LLMs on diabetes management. License these models to hospitals and other digital health platforms (B2B revenue stream). Expand to hypertension and cardiovascular disease using same AI infrastructure. Negotiate exclusive partnerships with top-3 CGM manufacturers for China distribution. Build regulatory moat by working with NMPA (China's FDA) to get ChronicCare classified as Class II medical device software, creating 18-24 month barrier to entry for competitors.

Monetization Strategy

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Primary revenue: B2B2C outcome-based contracts with insurers and employers at $200-400/patient/year (target 30% gross margin after CGM hardware costs if bundled, 70% margin on software-only). Patients never pay directly, eliminating consumer acquisition friction. Secondary revenue: Data licensing to pharmaceutical companies for diabetes drug trials and real-world evidence studies ($500K-2M per dataset). Tertiary revenue: AI model licensing to hospitals and digital health platforms ($50K-200K per institution annually). The key financial insight: by focusing on chronic disease with clear outcomes, ChronicCare can charge based on value delivered (HbA1c reduction saves insurers $3,000-5,000/patient/year in complication costs) rather than competing on consultation fees. Target $10M ARR at 25,000 patients by Year 3, with path to profitability at $20M ARR (50,000 patients) due to AI-driven low variable costs. Exit strategy: acquisition by Ping An Health, Ali Health, or CGM manufacturer looking to verticalize, or IPO on Hong Kong exchange at $300M+ valuation if scaled to 200K+ patients with proven clinical outcomes.

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