(March 24): Qiming Venture Partners, the early backer of tech heavyweights Meituan and Xiaomi Corp, is seeking to raise about US$800 million (RM3.5 billion) to ride a wave of renewed interest in Chinese AI startups, according to people familiar with the matter.

The company will cap the fundraising at US$1 billion, the people said, asking not to be named because the matter is private. The plans are preliminary and may change, they added. A representative for the fund declined to comment.

Qiming, led by founding managing partners Gary Rieschel and Duane Kuang, is part of a handful of China-focused US-dollar funds actively seeking money. While DeepSeek’s ability to create capable and low-cost artificial intelligence models has sparked investor interest in China, many US pensions and endowments remain on the sidelines and have yet to allocate significant sums of money to the country.

Last year, 11 China-based US-dollar VC funds raised US$1.3 billion, accounting for 28% of the total out of the Asia-Pacific region, according to Preqin. That compares with 62 funds raising US$17.2 billion — which accounted for 60% out of the same region — in 2021.

At the same time, many China funds are struggling to invest their capital due to a scarcity in attractive targets and a difficult exit environment. Some are negotiating extending their investment periods to gain more time to deploy capital and find better exit opportunities, raising the prospect of misaligned interests between fund managers and investors.

That’s even as China’s given rise to a flurry of AI models challenging US dominance, from Alibaba Group Holding Ltd’s R1-Omni and Qwen models to Manus AI’s agent to Tencent Holdings Ltd’s upgraded reasoning model.

Founded in 2006, Qiming has raised US$9.5 billion and seen 12% of some 580 portfolio companies go public, according to its website. It raised US$2.5 billion to invest in the consumer discretionary, health care and technology sectors via its Qiming Venture Partners VIII LP vehicle in 2022.

Uploaded by Magessan Varatharaja