Most Chinese VC firms have responded to adverse fundraising conditions by scaling back their ambitions. Qiming Venture Partners is no exception. The manager raised USD 2.5bn when it last came to market in 2022, completing the fundraise in a matter of months. This time around, the process is more drawn out, and the final total is likely to be around USD 600m.

At the same time, Duane Kuang, Qiming’s founding managing partner, claims to be enjoying something he hasn’t experienced in years: a good night’s sleep.

“Qiming is in a very good place. The external strategy changes are bearing early fruit, and the internal organisational adjustments have settled,” Kuang explained.

Starting around 2018, the firm executed two pivots. Its technology strategy moved away from consumer internet in favour of deep-tech, while healthcare investments shifted from an in-licensing model – turning overseas intellectual property (IP) into drugs for the China market – to “China innovation for global value,” which is predicated on the strength of domestic biotech innovation.

The fruit Kuang refers to has come in the form of liquidity events. Over the past six months, artificial intelligence (AI) chip manufacturers Biren Technology and Axera Semiconductor, large language model (LLM) developer Zhipu AI, and biotech players Insilico Medicine and Alamar Biosciences have completed IPOs. Alamar opted for Nasdaq; the others all listed in Hong Kong.

Moreover, Insilico recently signed an agreement with Eli Lilly whereby one of its diabetes drugs will be out-licensed to the US-based giant. The deal, which could be worth USD 2.75bn subject to the achievement of commercial milestones, amounts to a strong endorsement of Qiming’s global thesis.

Source: Qiming Venture Partners

On the organisational front, the launch of the new fund coincided with the departure of Nisa Leung, a managing partner who spent nearly 20 years helming the firm’s healthcare practice. Latterly, this role was shared with William Hu, another managing partner. As part of a transition plan announced in late 2024, Hu and Kan Chen, a partner, have assumed leadership of healthcare investments.

Qiming has seen senior departures before. Gary Rieschel, who founded the firm with Kuang in 2006, stepped back from day-to-day duties and then relocated to the US around 2016. He is still listed as a managing partner, alongside Kuang, Hu and Alex Zhou, on the firm’s website. JP Gan, another long-serving managing partner, exited in 2019.

It was previously reported that Kuang would retire gradually, yet he remains in post. Kuang said he felt a responsibility to stay with the team as it navigates a challenging environment. Ultimately, there will be an orderly transition.

“Organisations need to grow. Until the founder steps away from the limelight, it is hard for the next generation to really take the helm,” Kuang explained. “I have no plan to truly retire into the sunset and go fishing, but you will see the newer generation of Qiming leaders taking on more and more of the decision-making and market-facing roles.”

The right size?

The challenges facing the firm and many of its industry peers can be tied to tensions between China and the US – most visibly manifested in US-imposed restrictions on investor exposure to certain Chinese technologies – and to a certain extent regulatory uncertainty that has threatened exits. Kuang, for his part, blamed the problems on geopolitics, while declining to comment further.

Reduced fund size targets reflect the need to reconstruct LP bases amid concerns that US-based investors might be less willing to participate. Qiming claims a strong following among endowments, foundations, fund-of-funds, and sovereign wealth funds. Disclosed LPs include endowments under Princeton University, Massachusetts Institute of Technology (MIT), and Duke University.

Qiming, like others, is working to make its investor base more geographically diversified. Nevertheless, the run of consecutive increases in fund size that began in the second vintage is set to end. This development is viewed positively by some LPs, especially those who have become concerned about aggressive escalation in fund size in China and how this has contributed to elevated valuations.

“I think this could be one of their best-ever vintages,” said one existing LP, when asked for a view on a USD 600m target. “The opportunity set is compelling for those with capital to deploy. They will see everything, but they can set a very high bar.”

Qiming certainly participated in that escalation, notably in Fund VI when it scaled from USD 648m to USD 935m. At the same time, the firm was adjusting to the differing capital needs of healthcare and technology. That fund saw a 60-40 split in favour of technology. In Fund VII, which closed on USD 1.2bn in 2020, it was expected to be 50-50 but with healthcare taking up most of a 25% later-stage allocation.

In doubling the fund size to USD 2.5bn for Fund VIII, Qiming decided to split the vintage into distinct tranches: a core pool for deployment in early and growth-stage healthcare and technology and consumer opportunities accounted for USD 1.55bn; the rest went into a parallel healthcare-only vehicle.

The structure was designed to accommodate LP interest in China’s then-nascent innovative drug market, Hu explained. It allowed them to maintain early-stage exposure and then double-down in the later rounds as opportunities arose. In Fund IX, however, there will be no expansion vehicle. Qiming will concentrate on early-stage deals across technology and healthcare.

“Healthcare is a sector with relatively high predictability and sustained growth. Tech, on the other hand, is full of explosive potential, whether it was the mobile internet era or artificial intelligence,” Hu added. “By investing across both sectors, our LPs get a blend: we can pursue relatively stable, more predictable returns while also capturing those big, explosive upside opportunities.”

The firm is also active in the renminbi-denominated space, raising CNY 250m (USD 37m) for its first local currency fund in 2010. By Fund VI, it had stepped up in size to CNY 2.85bn, and then Fund VII closed in 2021 with commitments of CNY 6.63bn. LPs include Oriza FoFs, CDB Capital FoFs, and China International Capital Corporation (CICC).

According to Kuang, Qiming treats renminbi and US dollars as a single capital pool, with founder preference and listing strategy the main factors behind choice of currency. Geopolitics-linked investment restrictions haven’t fundamentally impacted the firm’s ability to use US dollars in its core areas of general-purpose AI, enterprise LLMs, and innovative biotech.

Small experiments

Qiming first made its name as an early-stage investor in technology, media, and telecom (TMT), riding China’s consumer internet wave. Success stories included consumer electronics brand Xiaomi, e-commerce player Meituan, online video platform Bilibili, and digital content community Zhihu. A large consumer internet team anchored the TMT practice.

As early as 2014, a small “tech core” – comprising Kuang, Zhou, and Kuantai Yeh, a partner – began exploring deep-tech. Four years later, even as Fund VI still skewed towards consumer internet, internal resources were being reallocated to build up semiconductor and AI expertise. When deployment of Fund VII began in 2020, the two teams merged.

“When those changes happen, we do make personnel changes. Those are tough decisions. Some professionals might be able to move over because of prior experience. But many cannot,” Kuang added.

In 2018, as the AI opportunity came into focus, Qiming decided to prioritise infrastructure – semiconductors, LLMs, and enabling tools – while holding back on applications. This proved prescient as US export controls and technology transfer restrictions meant China had to accelerate development of domestic AI infrastructure. Companies like Biren are direct beneficiaries of this trend.

Now, as foundation models mature and costs are dropping sharply, the firm is pivoting into vertical AI applications, embodied AI, and AI-healthcare convergence. Recent investments in this vein include Inspire-Robot, Ace Robotics, and AI companion start-up Nature Select.

Kuang describes Qiming’s organisational evolution as “starting from a smaller experiment.” If these experiments gain traction, teams expand and personnel are moved around accordingly. If they do not, Qiming is open to spinning out strategies and making LP commitments to funds raised by those teams or co-investing in alongside them.

Cleantech, for example, started as a two-person experiment in 2010 with an emphasis on environmental remediation. Nearly a decade later, it was decided that the business was unlikely to scale from 10% to 30% or more of overall assets, so the team spun out. The same happened with the firm’s crypto and digital assets practice.

Healthcare did catch on, and the team ended up expanding from two partners to 18 investment professionals – half of Qiming’s overall headcount. Hu, one of the first full-time healthcare investors, said the focus in those early days was on “building R&D infrastructure.” At the time, demand for quality care, an aging population, import substitution, and clinical research systems were not prevalent topics in China.

Qiming was well positioned to back the country’s first generation of contract research organisations (CROs) and contract research, development and manufacturing organisations (CRDMOs) such as Tigermed and WuXi AppTec. It was the sole investor in a USD 5m round for Tigermed in 2008, saw the company go public in Shenzhen in 2012, and eventually exited with a 23x return.

“One home run covered the entire cost base of Qiming’s fund at that time. That gave us a lot more confidence in healthcare investing,” Hu said.

It moved on to backing local innovators as China’s R&D ecosystem matured and a wave of overseas-educated scientists returned home to launch biotech start-ups. In-licensing became the dominant model, with Qiming getting exposure via a 2014 investment in Zai Lab, which ultimately went public.

When in-licensing was on the ascendency, the firm was already exploring out-licensing. China’s cost and efficiency advantages in drug development were well understood, but it was becoming apparent that domestic biotech businesses could deliver globally competitive IP as well.

This capacity for innovation is also evident in med-tech and AI for healthcare, prompting recent investments in HugeMed, a manufacturer of single-use endoscopes, and Tianwu Technology, which uses AI in protein synthesis.

“Chinese innovation is creating value for the world,” Hu added. “I have tremendous confidence in this thesis, and we will continue to focus deeply on it for the next 5-10 years.”