The Financial Times said that HongShan Capital, formerly known as Sequoia Capital China, is rumoured to have established and raised a $2.5 billion fund.
According to two people with knowledge of the situation, the venture capital firm—which was formerly Sequoia Capital’s China unit—closed the renminbi fund successfully in March, the report continued.
As per the report, this is the biggest fundraising that a privately-owned venture capital firm in China has done in the previous year, indicating the continued influence of its founder, Neil Shen, who is widely regarded as the most influential tech investor in the country.
According to the people, a number of state-owned and private insurance companies as well as the city government of Hangzhou support the new fund. The fund size is not as large as HongShan’s 2022 fund raising of $9 billion US dollars.
The fund raise coincides with a period of economic and real estate turmoil that has affected startups in China. The long-term consequences of a government crackdown on tech groups also caused valuations to plummet and derailed plans for stock market listings.
Shen is credited with spearheading some of the most profitable tech investments in China, such as ByteDance, the parent company of TikTok, DJI, and e-commerce giants Meituan, Alibaba, and Pinduoduo.
Zhipu and Moonshot, two of the top domestic startups vying to become China’s equivalent of OpenAI, have received investments from HongShan this year, according to FT.
Shen spoke earlier at The BEYOND Expo 2024’s opening ceremony about embracing uncertainty.
“As investors, particularly in venture capital, dealing with uncertainties is a constant reality. These uncertainties arise from multiple sources. Our portfolio companies face inherent business uncertainties, but broader challenges also play a significant role. Financial market fluctuations can impact even early-stage companies, affecting capital availability and venture funding.”
He said, “Disruptive technologies add another layer of uncertainty. For our portfolio CEOs, the key is to anticipate and strategically position for such uncertainties. Much like adjusting speed to navigate potential hazards on a highway, being proactive, staying ahead of trends, and planning strategically are crucial.”
“For companies aiming to establish their differentiation, it is crucial to delve deeply into one area to develop expertise. The first essential step is to become a dominant leader in a specific field before considering expansion,” he added.
