Anew Labs Raises $290M at $1.5B Valuation, Reuters Reports

ByteDance has finalized a $290 million funding round for Anew Labs, its newly independent artificial intelligence drug discovery subsidiary, valuing the entity at $1.5 billion. This financial milestone, reported by Reuters with confirmation from sources familiar with the deal, solidifies ByteDance’s position as the majority owner of the business, retaining a 56% stake post-investment. The move marks a significant strategic pivot, separating the high-tech biomedical research arm from the social media giant’s core entertainment and technology operations.

The investment was spearheaded by HSG, formerly known as Sequoia China, in collaboration with IDG Capital and Hillhouse Investment. The transaction saw participation from several other prominent venture firms, including 5Y Capital as co-lead, alongside Gaorong Ventures, Primavera Venture Partners, and Boyu Capital. Additionally, the state-backed Shanghai Future Industries Fund joined the round, while SBP Group entered as a strategic investor. This diverse pool of backers highlights strong institutional confidence in the viability of AI-driven pharmaceutical development.

The structural separation of Anew Labs was first hinted at by Intelligent Emergence, a publication under 36Kr, which detailed that roughly 50 core employees would transfer to the new entity. Alongside the staff, the company acquired essential assets including proprietary algorithms, its technology platform, and existing drug pipeline projects. To ensure operational continuity, Volcano Engine, ByteDance’s cloud computing division, will continue to supply the necessary computational power for complex modeling tasks.

Leadership of the new unit falls to Liu Kai, who brings extensive experience from his seven-year tenure in venture capital at IDG Capital and Fire Stone Investment before joining ByteDance in 2021. His former employer is now among the key investors backing the spin-off. According to Reuters, the split was designed to foster long-term growth by allowing the drug discovery unit to operate under a management logic distinct from ByteDance’s consumer-facing businesses. Intelligent Emergence characterized this restructuring as the initial phase in commercializing the company’s broader “AI-for-science” initiatives.

Technologically, Anew Labs has focused on advancing structure-prediction and protein-design models, notably developing tools like Protenix and PXDesign. The company currently oversees four drug candidates, one of which was recently showcased by Chris Li, head of the biology department. At the American Association of Immunologists’ meeting in Boston earlier this year, Li presented an AI-designed IL-17 inhibitor, demonstrating the practical application of their research.

Global presence is established through offices in Shanghai, Singapore, and San Jose, California. In May, the company publicly listed 36 core team members on its website, signaling its readiness for external engagement. For Jack Ma, whose portfolio includes TikTok and CapCut, acquiring a majority share in a biotech firm with no approved medicines yet represents an unconventional expansion into deep science and healthcare innovation.