ByteDance has reportedly closed a $290 million funding round for Anew Labs, its AI-driven drug discovery unit, following the business's carve-out from the parent group, according to two sources familiar with the matter.

The Shanghai-headquartered Anew Labs, which leverages artificial intelligence for pharmaceutical research, has reached a valuation of $1.5 billion after this initial external capital injection, one of the sources said.

The financing was spearheaded by existing investors including HSG (formerly Sequoia Capital China), IDG Capital, and Hillhouse Investment, with 5Y Capital serving as a co-lead investor. Additional backers include Gaorong Ventures, Chunhua Ventures, Boyu Capital, along with strategic investor SBP Group and the state-backed Shanghai Future Industry Fund.

The sources requested anonymity as the funding details have not been made public. ByteDance and the participating investors did not immediately respond to requests for comment.

One insider indicated that Anew Labs was separated from ByteDance because AI drug discovery operates under distinct industry logic and management practices compared to the company's core business, making the spin-off beneficial for the unit's long-term growth. Another source noted that ByteDance will maintain a 56% stake in Anew Labs following the funding round.