HongShan Capital, previously known as Sequoia Capital China, is said to have set up and raised a $2.5 billion fund, The Financial Times reported on Tuesday.

The venture capital firm, which is also Sequoia Capital’s former China unit, is said to have successfully closed the renminbi fund in March, the report added, quoting two people with knowledge of the matter.

The report also said it is the largest fundraising by a privately-owned VC firm in China in the past year, marking the ongoing influence commanded by its founder Neil Shen, often considered the country’s most powerful tech investor.

The new fund is backed by the Hangzhou city government and a number of private and state-owned insurance companies, the people reportedly said. The fund size, however, is smaller than HongShan’s $9 billion US dollar fund raised in 2022.

The fund raise comes at a time when startups in China have been hit by an economic and property crisis. The lasting effects of a regulatory crackdown on tech groups also sent valuations tumbling and crushed plans of stock market listings.

Shen has been behind some of the most lucrative Chinese tech investments, including TikTok parent ByteDance, drone maker DJI and ecommerce groups Meituan, Alibaba and Pinduoduo, according to the report.

This year, HongShan has invested in Zhipu and Moonshot, two of the leading domestic startups racing to become China’s answer to OpenAI, according to FT.
HongShan declined to comment to the report.

Earlier at the opening ceremony at The BEYOND Expo 2024, Shen shared his insights on embracing uncertainties.

“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.

[BEYOND Expo 2024] Global innovators gather at BEYOND Expo 2024 opening ceremony to discuss the future of technology