A familiar scene after a long time.
Author/Feng Yucheng
Report/Investment Circle - Decoding LP
Let's start with this scene.
Recently, Zhaoyi Innovation announced: its wholly-owned subsidiary, Xinjijia Yiwai Electronics (Hong Kong) Technology Co., Ltd., used its own funds to invest $100 million to subscribe for shares in Yunfeng Capital’s (YF Capital) Yunfeng Investment V, L.P., thereby investing in Yunfeng Phase Five (USD) Fund.
The founder of Zhaoyi Innovation is Zhu Yiming, and his other company, Changxin Technology, just went public on the Sci-Tech Innovation Board in July. The semi-annual report shows that Zhaoyi Innovation has cash on hand of up to 16.9 billion yuan. Since 2017, this leading storage chip company has repeatedly invested as an LP, and this recent investment of over 600 million yuan in Yunfeng Capital is the largest in recent years.
This also marks a rare involvement of Zhaoyi Innovation in a USD fund. Reports indicate that many institutions, including Sequoia China and Mingshi Venture Capital, have recently been planning to raise USD funds. "The USD fund market is bustling," this feeling has become increasingly strong this year.
A back-feeding scene: investing in Yunfeng Capital
A fund targeting a size of $2 billion has emerged.
The announcement shows that Zhaoyi Innovation’s subsidiary has subscribed for 25% of the shares in the offshore private equity investment fund Yunfeng Investment V, L.P., while the remaining 75% of the shares are contributed by three entities controlled by Yu Feng.
This means that Zhaoyi Innovation becomes the only external investor in this fund. The fund has a lifespan of 10 years and can be extended twice, primarily investing in companies with significant business layouts within Asia and those with potential for expansion into Asia, focusing on companies engaged in technology, tech-related services, and other relevant fields.
According to the announcement, the fund that Zhaoyi Innovation is directly investing in has a scale of $400 million but will ultimately invest in the target scale of $2 billion underlying fund "Yunfeng Phase Five (USD) Fund."
The venture capital circle is not unfamiliar with Yunfeng Capital.
The official website shows that this institution was founded by Jack Ma and Yu Feng, the founder of 99Bill, in 2010. It has since established five phases of RMB funds and five phases of USD funds, covering fields such as technology, healthcare, and consumption. The aforementioned Yunfeng Phase Five (USD) Fund was just established in 2026.
In the list of projects invested by Yunfeng Capital, there are known companies including Changxin Technology, which was founded by Zhu Yiming, as well as Contemporary Amperex Technology Co., Limited (CATL), XPeng, Momenta, Horizon Robotics, Lanqi Technology, Kimi, Xiaomi, Zhuming, Xreal, Wei Long, Xun Ce, WuXi AppTec, among many others.
Yunfeng Capital has also invested in Zhaoyi Innovation. In January of this year, Zhaoyi Innovation listed on the Hong Kong stock market, with New Alternative Limited and New Golden Future Limited, both controlled by Yunfeng Capital, participating as cornerstone investors with investments of $25 million in Zhaoyi Innovation’s H-shares, and later acquiring additional shares in the international placement. At the same time, Strong Media, wholly owned by Yu Feng, also participated in the international placement, investing approximately 154 million HKD.
"Today you are my investor, tomorrow I will be your LP," this is another back-feeding scene in the venture capital circle.
However, this is not Zhaoyi Innovation's first time acting as an LP for its backers. For example, Qingkong Ginkgo was an early investor in Zhaoyi Innovation and was once its largest institutional investor and second-largest shareholder. In 2023, the publicly listed Zhaoyi Innovation subscribed for shares in the Qingkong Ginkgo fund for 64 million yuan, accounting for 16% of the total subscribed capital of the fund.
Recently, several industry leaders have been actively becoming LPs. In June, Changxin Technology announced the establishment of a nearly 4 billion yuan private equity investment fund partnership with Zhongwei Company and Alibaba, in which Changxin Technology committed to 1.173 billion yuan. Additionally, several leading companies such as Changfei Optical Fiber, Sungrow Power Supply, Muxi Co., Ltd., Changdian Technology, among others, have all laid out investments in the primary market in the first half of this year.
Reflecting on the past, these companies were once popular projects that investors vied for, but now they have grown into industry leaders and are actively enabling the primary market, creating a new capital cycle.
"The money has come back"
Notably, Zhaoyi Innovation has invested in a USD fund.
Since 2017, Zhaoyi Innovation has invested in several RMB funds including Beijing Yi Tang Hua Chuang, Beijing Xiaomi Zhizao, CICC Qizhao Ruihong, Qingkong Ginkgo Innovation, Yingfutai Technology Innovation, Hefei Shixi Zhaoyi Chuangzhi, among others. With this recent move, Zhaoyi Innovation will form a dual-currency LP pattern for the first time with RMB and USD.
Looking over this year's primary market, many industrial LPs have also engaged in USD funds.
In May this year, Longqi Technology announced that its wholly-owned subsidiary participated in investing $41 million in TECHNOLOGICAL OVERSEAS CAPITAL 3 LIMITED, with a target fund size of $64 million. Additionally, Century Huatong, 37 Interactive Entertainment, Nanjing Xinbai, Yuxin Technology, among others, have all disclosed information about investing in offshore private funds.
"The USD fund market has become lively."
Recently, Bloomberg reported that Sequoia China has initiated preliminary discussions with investors regarding multiple funds, including its first USD fund since going solo, reportedly discussing raising at least $1.2 billion for an early-stage investment fund to support companies in AI, healthcare, and consumer sectors. However, this news has not been confirmed by Sequoia China.
The report also mentioned that Bole Investment, Hillhouse Capital, and Chuanghua Capital have also begun fundraising in recent months. According to the Financial Times, IDG Capital, Matrix Partners, Mingshi Capital, among others, are planning or have started fundraising efforts. At the same time, Zhen Fund and Qiming Venture Partners have recently completed USD fund raise.
Looking back at the first half of the year, many well-known institutions like Source Code Law, Blue Lake Ventures, Photosynthesis Ventures, and Black Ant Capital have announced successful USD fundraising.
As the data from Qingly Research indicates, in the first half of 2026, the newly raised amounts for new foreign currency funds significantly rebounded year-on-year. In the first half of the year, 19 foreign currency funds completed their new rounds of fundraising, with a total amount of approximately 45.26 billion yuan, a year-on-year increase of 122.5%.
The money has come back, and behind it is the new vitality being released from the industrial value in China. Especially this year, with the explosive growth of China's AI and hard technology industries, the prediction of an "IPO boom year" continues to be validated, with several companies in sectors such as AI chips, semiconductors, and embodied intelligence successfully entering a harvest period.
No one wants to miss the opportunity.
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