Chinese technology startups are experiencing a surge in fundraising activity, fueled by the recent advancements of DeepSeek in artificial intelligence and President Xi Jinping’s show of support for private enterprises.
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Several companies, including AI-powered optics startup Rid Vision, brain-computer interface firm AI CARE Medical, and robotics company Shanghai Qingbao Engine Robotics, are actively seeking fresh investment capital. According to venture capitalist Andrew Qian, CEO of New Access Capital, which has invested in these three firms, “Many people are knocking at the doors of these AI companies, half discussing business cooperation, the other half talking about investment.” He added, “You can see from the DeepSeek case, that a batch of Chinese innovators with disruptive technologies is emerging… Previously, Chinese start-ups were nearly all ‘me too'”, referring to businesses that were copying existing technology.
The increased interest in AI is breathing new life into China’s previously stagnant venture capital sector. This enthusiasm follows DeepSeek’s emergence as a major AI player and a meeting this month between President Xi and tech leaders. However, uncertainties remain, particularly concerning stringent IPO regulations and geopolitical tensions that could impact offshore listings.
New Access Capital is also making strategic investments, recently backing a chip startup and a maker of millimeter wave antennas, with plans to invest in a company focused on rocket recovery technologies. Qian views these as opportunities to find the next ‘DeepSeek’.
Other companies are also benefiting from this wave of investment. AI image generation platform LibLib AI recently secured several hundred million yuan in a new funding round. Additionally, AI-powered medical startup SenseCare raised 100 million yuan, while chipmakers Aspiring and Hyseim announced fresh fundraising efforts.
Despite challenging market conditions, including a decline in venture capital funding since 2021, caused by strict IPO rules and geopolitical tensions, the sentiment has improved. Huo Zhongyan, founder of Bonanza Capital, which invested in an AI-powered garment design startup, noted “People get more sanguine about China’s future … Stock bullishness made entrepreneurs more confident, and investors more willing to place bets.”
While Morgan Stanley sees signs of normalizing IPOs, industry experts like Huo remain cautious about the potential for relaxed IPO criteria and the vulnerability of offshore listings to geopolitical developments.
