Xellar Technology, a Chinese biotech firm, has raised over 200 million RMB in a Series A round to scale its organ-on-a-chip platform, positioning it at the center of a global regulatory shift away from animal testing in drug development. The funding, led by China Life Equity Investment, follows Xellar’s selection as the only Chinese company in the U.S. Food and Drug Administration’s (FDA) program to validate new alternative methods.
"Customers are no longer paying just for 'technical experimentation,' but to 'reduce R&D uncertainty and the risk of failure'," Xie Xin, CEO of Xellar Technology, said in an interview. "When the policy clearly encourages alternative technologies, and we ourselves are in the regulatory validation path, the customer's perception of our technology changes from 'frontier exploration' to a 'solution with forward-looking regulatory value'."
The Series A round also saw participation from existing investors including Crystal Horse, Ya-Yi Capital, and Legend Capital. The capital will be used to expand Xellar’s portfolio of organoid disease models and build out its high-throughput, AI-driven mechanism research platform. The company reports its platform achieves a coefficient of variation (CV) below 10% and a Z' factor over 0.5, metrics indicating industrial-grade stability and reproducibility for large-scale data generation.
Xellar’s progress highlights a critical inflection point for the $30 billion global contract research organization (CRO) market. As regulators like the FDA actively create pathways to replace animal models with technologies like organoids, companies that master this new infrastructure stand to capture significant value. For pharmaceutical and biotech firms, adopting these platforms could de-risk preclinical development, potentially saving billions in failed clinical trials.
The move away from animal testing is gaining momentum on both sides of the Pacific. In April 2025, the FDA released its roadmap to phase out animal experiments for certain preclinical safety studies. Just months later, China’s regulatory bodies jointly issued a plan to promote digital transformation in the pharmaceutical industry, explicitly mentioning the use of computer simulation to replace animal models.
This regulatory alignment provides a powerful tailwind for companies like Xellar. Its inclusion in the FDA's Innovative Science and Technology Approaches for New Drugs (iSTAND) program, specifically for a project on drug-induced liver injury, lends its platform significant credibility.
"Our ability to provide stable, reproducible results and complete, traceable data documentation was key to our selection by the FDA," Xie said. He noted that this regulatory validation creates a significant barrier to entry, as competitors would need a long time to complete a similar process.
Compared to a field of international competitors including CN Bio and InSphero, Xellar claims its key differentiator is its "3D Bio Intelligence" system. This platform integrates its proprietary organ-on-a-chip wet lab experiments with AI-driven data analysis, creating a "wet-dry" closed-loop system.
The process involves generating high-dimensional biological data from the organoid models, using AI to analyze the data for mechanistic insights, training predictive models, and then using those models to design new experiments. This feedback loop, according to Xie, allows the platform to continuously improve its predictive power.
"Our most exclusive asset is the 3D wet-lab data generated by our own organ-chip platform," Xie stated. "Unlike data from public databases, ours is generated under standardized, reproducible conditions that are closer to real human physiology."
This capability extends beyond drug development into markets like cosmetics and nutritional health, allowing Xellar to diversify its revenue and data sources. The company’s business model is centered on platform-driven collaborations with pharmaceutical companies, moving from single-project validations to long-term framework agreements that embed its technology into the R&D workflow.
This article is for informational purposes only and does not constitute investment advice.
