HSG, the China-focused investment firm previously known as Sequoia China, has begun preliminary talks with investors to raise multiple funds, including its first US dollar fund since separating from its US counterpart, Bloomberg reported.
Led by its billionaire founder Neil Shen since 2005, HSG is seeking at least $1.2 billion for an early-stage fund to invest in companies in the artificial intelligence, healthcare, and consumer sectors, the report said, citing people familiar with the matter.
Besides the early-stage vehicle, HSG is also considering a growth fund, with its size and timeline yet to be determined, as well as a separate Chinese yuan fund.
While the new funds will maintain a focus on China, the firm remains open to investment opportunities globally.
Testing waters after global realignment
The fundraising plans will see HSG test market sentiment three years after announcing its split from the global “Sequoia” partnership amid “increasingly complex” market dynamic, including heightened US-China geopolitical tensions.
Formerly the China arm of the global Sequoia structure, HSG officially took the name HongShan (HSG) in English to operate as an independent entity after the split, while Sequoia’s Southeast Asia and India arm was rebranded as Peak XV Partners. The US firm retains the Sequoia branding.
Historically famed for its early bets on high-profile companies like ByteDance, JD.com, and Shein Group, HSG has over the years expanded beyond early-stage deals into growth, buyout, infrastructure, and public equities.
Following the split, it also built new offices in London, Tokyo, and Singapore, adding to existing operations in Greater China across Hong Kong, Shanghai, Beijing, and Shenzhen.
Its latest landmark buyout deals include taking majority stakes in Swedish audio brand Marshall Group AB for about $1.15 billion and Italian luxury sneaker maker Golden Goose in 2025.
As of April 30, HSG manages over $61 billion in assets for institutional investors. The firm has backed over 1,700 companies. To date, more than 180 HSG-backed companies have gone public, and over 140 have reached the unicorn status at a valuation of $1 billion or more, according to its official website.
Riding the AI wave
Its first USD capital raising under the HSG brand comes amid a broader resurgence of fundraising efforts among China-focused general partners (GPs), largely driven by breakthroughs in open-source AI technology and an opening listing window in China in recent months.
In the AI sector, HSG has backed Chinese champions including Hong Kong-listed MiniMax Group; and Z.ai, also known as Zhipu.
It is also an investor in Hong Kong IPO-bound Moonshot AI and Unitree Robotics. The retail tranche of Unitree’s much-anticipated $900-million listing on Shanghai’s Nasdaq-style STAR Market drew historic demand with a 5,526-fold oversubscription and a record online winning rate of 0.018%, or 1 in 5,500 odds.
Just two days ago, HSG jointly led a $220-million angel round for Chinese nascent AI agent startup Pragmatik Labs, founded by ex-Alibaba’s Qwen AI model head Lin Junyang (林俊旸). The deal valued the newly built startup at 2 billion yuan ($296.7 million) post-money.
Previously, HSG raised about $9 billion for four new funds in 2022 to invest in startups across seed to growth stages. It reportedly secured the money independently without participation from the other two operations.
HSG also closed an RMB-denominated fund at about 18 billion yuan ($2.5 billion) in July 2024 with support of investors including private and state-owned insurers in China, DealStreetAsia reported.
