Kerry Han Lands His First Fundraise of 2025, Says He'll Reject All US Dollars

By Zhiyan Chen

Han Yan is an investor who defies easy categorization. In 2008, at age 27, he left McKinsey for venture capital, joining Lightspeed just as the American firm was establishing its China presence. He started as an investment manager. His path to becoming a GP ran through helping Lightspeed's China office gain independence, leading its dual-currency transformation and growth — while most of his peers were leaving big institutions to launch VC 2.0 firms. He made a name for himself by leading Series A investments in Tujia, Xin Technology (PPDai), Xingren Doctor, Full Truck Alliance, and XPeng. Yet in public, Han prefers to talk about organizational change, firm-wide carry, and team rejuvenation rather than deal-making.

Eight years ago, when Han made the 36 Under 36 list at 35, we sat down for an in-depth interview. In that piece, we wrote that the industry had two fundamentally different types of investors: those who leaned theoretical, excelling at top-down deduction, and those who leaned visceral, with a keen sense of gaps and opportunities in the real world, timing their entry precisely. Han was the latter.

This also means Han doesn't fit the standard "typical investor" profile. Rather than rehearsed investment methodologies, he'd rather discuss human nature, spirit, and love. He loves telling stories about soul-level connections with founders. He'll bring up the "look in LPs' eyes wanting to understand China" that he saw in the Middle East, or the time he took his entire team to Sicily for a retreat, breaking through conventional limits. Han says he believes in "the combination of rational induction and intuitive deduction."

Two years ago, Han founded Heart Capital. Today, the nascent firm has held the first close on its new RMB fund. The "Heart Capital RMB Discovery Fund" is targeted at 1 billion yuan.

In a challenging primary market, dollar-background GPs raising RMB funds often hit a wall — few clear it successfully. When we asked how a dollar-fund veteran builds a new RMB-raising GP, Han's answer was: you have to have actually made people money, and you have to understand LPs' needs and fears. Figuring that out took him a year and a half.

The answer, characteristically, was intuitive.

Han has put forward a bold new positioning: building a China dual-currency fund in RMB and non-US dollars. While diversified LP structures have become industry consensus for dollar funds in recent years, Han's approach is more "radical." He told Anyong Waves: "Non-US means non-American brand, non-American nationality. Not even one million US dollars in the fund pool. Unless you're not planning to invest in new materials, chips, hard tech, large language models — and that list only gets longer."

The reasoning behind this choice is evident in Heart Capital's portfolio: new energy, semiconductors, aerospace, AI large models. In new energy and new mobility, the firm has invested in Full Truck Alliance, XPeng, WorldEx, LandSpace, MinoSpace, XPeng AeroHT, and RoboSense. In AI, it has backed Baichuan Intelligence, MetaX, Lanhu, Heart Shadow Companion, and Sharge.

Han says Heart Capital focuses on the top 1% of core assets in AI, robotics, new energy, and new mobility, aiming to be the "first institutional investor" for outstanding Chinese entrepreneurs.

If intuition once helped Han spot needs earlier and find investment opportunities, the flip side is that in building a new brand, intuition can also be understood as sensing the temperature of the era and maintaining sufficient flexibility. That may be the real key to how Han cleared that hurdle.

The following is Anyong Waves' conversation with Han Yan, founding partner of Heart Capital —

Building a Non-US Dollar Fund

Anyong: What's the most important decision you've made in recent years?

Han Yan: The world has changed dramatically. The era of American dollars is over. Everyone has to make a choice. My thinking was simple: don't make the wrong easy decision.

Anyong: What's the "wrong easy decision"?

Han Yan: Moving your body to create a sense of security. So many young people relocated to Singapore thinking they'd be safe. That's the wrong easy decision.

Anyong: Then what's the hard right decision?

Han Yan: Building an investment firm that's "RMB plus non-US dollar" — a non-US dollar fund.

The industry is undergoing massive reshuffling. It's genuinely hard. The first difficulty is that many people can't even make a decision. The second is understanding China, embracing China, and then better opening up to the world.

Logically, choosing China or choosing America are both valid — as long as you choose one of the two. I'm Chinese. For a long time, Chinese people going to America couldn't access core assets. So what was there to think about? All in on China was the obvious call.

On that foundation, since the world is fragmented, people need the ability to adapt to multiple different systems. I can flexibly embrace China, and I have the will and the ability to bring excellent Chinese companies to the world. So for me, it wasn't that hard.

Anyong: Many dollar funds have already diversified their LP bases, with American dollar allocations declining.

Han Yan: Non-US also means non-American brand, non-American nationality. Not even one million US dollars in the fund pool. Unless you're not planning to invest in new materials, chips, hard tech, large language models — and that list only gets longer.

US-China competition is actually healthy. It's the inevitable product of two things reaching a certain stage of development. And it's not temporary — it's long-term. Once I fully understood this, the decision followed naturally.

Anyong: Very few "new GPs" from dollar fund backgrounds successfully raise RMB funds, so you had to take a clear "side"?

Han Yan: The most important thing was my determination to raise RMB funds, my determination to embrace China. In 2016, when Lightspeed China raised its first RMB fund, I went on the road too. Some of those LPs are now Heart Capital LPs.

Anyong: But the environment has changed a lot between eight years ago and today.

Han Yan: The foundation of RMB fundraising now is state capital. What do local governments need? To complete reinvestment targets, to upgrade local industry. So a GP needs to think about three things: first, whether investment directions align with local industry; second, helping government manage risk control and avoid potential accountability issues; third, not just thinking about year one of investment, but planning for years two, three, four, and how to exit.

Raising RMB requires understanding LPs' needs and fears even more, creating long-term mutual wins.

Anyong: Can you be specific?

Han Yan: For example, I'll talk with local governments about cycles in robotics, eVTOL. When is it worth investing? When should you definitely not rush in. For local governments, the simplest version of "investment-led招商" is "the investment firm brings three mediocre companies to set up locally." Year one, targets met — everyone's happy. Year two, something feels off. Year three, all three are gone. That kind of GP is essentially a premium intermediary.

My approach is clear: I'll bring at most two companies to a locality, probably one. But these will be chain leaders, and they will definitely exit. Even if risks emerge, we'll find solutions early. In return, I ask the government and Heart Capital to together spare no effort in supporting it, helping it grow.

Anyong: How does the trust in between develop?

Han Yan: You have to have actually helped them make real money. The first LP in our RMB fund came to us. Early 2023, someone called me. He said: "Are you Mr. Han? You probably don't remember me, but I know you." I initially thought it was some new scam. Turned out he was a local bureau of science and technology director.

Previously, my investments in Full Truck Alliance and Jishi had both landed in his jurisdiction and become major local taxpayers. At the time, this director didn't even know I'd started Heart Capital — he came to me to see if he could dig up more companies from my portfolio. Later, this very market-oriented state entity became my first confirmed LP.

Anyong: Could you just do RMB funds now?

Han Yan: No, because our portfolio companies will have overseas business. I believe they'll have more overseas business in the future, possibly listing in Hong Kong or overseas. I want Heart Capital to participate.

Anyong: So your 2023 Middle East trip was for dollar fund fundraising?

Han Yan: That was just one aspect. Ten companies from our ecosystem went with me. The process not only exposed Middle Eastern funds to Chinese technology, but also brought our companies partnerships, investments, and orders.

Anyong: What was your biggest takeaway?

Han Yan: Chinese companies are too easily misunderstood. In Abu Dhabi, a local investor told me: Americans do 1 and talk 10. Indians do 1 and talk 30. Chinese do 10 and talk 1. So Heart Capital is also recruiting global Chinese talent for teams in the UK and Dubai, to help excellent entrepreneurs integrate into world culture.

Anyong: Why are you able to do this?

Han Yan: Over the past three years I've traveled to many countries in Europe and the Middle East — London, Oslo, Abu Dhabi. When I talk with local LPs, they say it's rare to see a second-generation Chinese GP come through. Someone who grew up organically from junior to GP, isn't rushing to acquire various passports, can speak English and drink baijiu — there actually aren't many like that in China.

Anyong: For a first-round fund like Heart Capital, are mainstream LPs still willing to buy in?

Han Yan: Most LPs don't see me as a first-round fund. That's my advantage. I'm not a typical partner who left an institution to go solo. I'm a 50% equity shareholder — to this day, I'm still a 50% shareholder and key person in the management companies of Lightspeed China's 2016 and 2019 dollar and RMB funds. My team and I continue to manage exits and operations.

Anyong: One trend in recent years is LPs reducing primary market allocations in their asset allocation. Is this still a good time to build a new firm?

Han Yan: Good and bad. The bad is it's a new brand. But that's fine — brands are built by people; where there are people, there are brands. The good is that while I'm a new brand, I'm the least burdened and most legacy-rich among new brands. From another dimension, entrepreneurs will always need primary market investors. The investors who help entrepreneurs create the most value are the ones who believed in them earliest.

Embracing Change

Anyong: Looking back, no one would have thought 2022 was a good time to start a new VC.

Han Yan: I thought it was great. The opportunity is superb. Don't you think so?

Anyong: Can't raise funds, can't find good deals, portfolio companies can't exit — these practical problems aren't hard?

Han Yan: I think what makes people most uncomfortable is that the game has changed. The old dollar fund model of investing in 100 to get one home run definitely doesn't exist anymore. The future of this world is a hard tech "arms race" — embracing AI, energy, robotics, eVTOL, high-end chips, everything "sensitive." So why can't companies in these fields exit? Either they're not profitable and just burning cash, or their tech innovation isn't strong enough, or they're not among China's core assets. Why can't we adjust ourselves to invest in China's core assets, the most "sensitive" technology?

Anyong: Changing the game — is that the most important factor behind starting Heart Capital?

Han Yan: I know what you're trying to ask, but I promised my long-time partner I wouldn't go there. What matters is that people need to embrace change.

Anyong: Heart Capital's website has a slogan: "The earliest companion of non-consensus value." But most of the areas you mentioned are already investment consensus.

Han Yan: Mobile internet was consensus back then, right? Peers invested in tons of mobile internet companies. I invested in the non-consensus within mobile internet — Full Truck Alliance. Consensus is the macro trend; non-consensus is the detail. Consensus is AI large models; non-consensus is Heart Capital investing in Baichuan.

Anyong: Why invest in Wang Xiaochuan?

Han Yan: Many people ask me this. Just one reason: the bar for founders today is incredibly high. You need to collect all seven abilities to "summon the dragon" — team-building, technical depth, fundraising, government relations, commercialization, big tech relationships, and data capabilities. For AI large models, add the ability to secure GPU compute.

Anyong: Then why could you get into Baichuan?

Han Yan: I met Xiaochuan six or seven years ago. As CEIBS alumni, we traveled to the US together. Not for research — just for fun. Xiaochuan's co-founder Ru Liyun is also an old friend; I'd invested in his previous AI education startup. Later, Xiaochuan and I connected because we recognized each other's dreams. When everyone said they'd do general-purpose large models, he said he'd focus on healthcare. For smart people, the brain is always online. But a successful founder needs the stubbornness to actually make something hard happen.

Anyong: Non-consensus was the classic dollar fund investment logic, but what you ultimately earned was high-growth money. Will such opportunities still exist?

Han Yan: China still has high growth, but two conditions must be met: first, the direction must be one that all of China and the whole world believes in — it needs the narrative. Second, within that direction, choose companies that have both revenue and profit. With narrative, fundraising can continue. With narrative but no revenue, valuation can still rise, but it won't be the biggest. With both narrative and revenue, you get high growth and high returns.

Anyong: You do early-stage investing. How do you determine there will definitely be revenue at a relatively early stage?

Han Yan: Good question. Look for signals. I have one win and one miss. The origin of investing in XPeng was that I was among Tesla's first Model X owners in China. The exhilaration of driving Tesla was something that could generate revenue — so China needed its own Tesla. That's why I invested in XPeng. The miss was Pony.ai. When they were just ten people, I met Tiancheng Lou and James Peng in the US. At the time, valuation was $100 million, raising $20 million. I genuinely thought it was expensive, hesitated, and went to look at second, third, fourth place. Found none worked. By the time I circled back to Pony, valuation had moved up. Later I realized: EV is such a massive thing, autonomous driving revenue could be "blasted out" — it wasn't a narrative-only, no-revenue business. So revenue and profit are things with signals. You have to run in bravely.

Anyong: The signal is that the market is big enough?

Han Yan: Whether the market is big doesn't need a signal. The signal is the possibility of repeated utilization at a very small, individual unit level.

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Heart, Time, and Love

Anyong: The primary market is somewhat hierarchical. Does your previous position become baggage?

Han Yan: I'm born in '82, still young. What baggage do young people have? As a child, I played with Zhou Haiying (son of Lu Xun) with ham radio, building radios and telegraphs. Because of this, I later studied double E at Shanghai Jiao Tong. Then Microsoft China, McKinsey, then co-founding a fund brand. On that foundation, applying what I've learned, the resources and experience accumulated, to a new fund brand — zero baggage. The 20 years I've walked through are the 20 years of China's internet and tech rising to prosperity. From Jiao Tong engineering guy to Microsoft engineer to today investing in high-tech — my career trajectory resonates with the era's development. The first 20 years have concluded; another journey in my life begins. Going forward, I want my brain to stay online, and my heart even more so.

Anyong: Why "Heart Capital"?

Han Yan: Investing with heart is the shallowest layer. I hope that in the next 20, 30 years, I won't just support founders with money, but become a "co-cultivator" of the spirit with them, using soul power to support them. The most important thing in life is heart power — using your heart to feel what you want to do, who you want to work with.

Anyong: Sounds a bit mystical.

Han Yan: Let me give an example. Did Elon Musk succeed because he's individually brilliant? Not entirely. He got a bunch of the best people to follow him in doing Tesla and SpaceX with the same madness. How did he convince them? Just brains? No, it's that asshole-yet-extremely-mad "savior of Earth" belief. Does that belief come from the brain? No, it comes from the heart.

Anyong: Among the founders you've invested in, who gives you that soulmate feeling?

Han Yan: Many. For example, Hui Zhang (Chairman and CEO of Full Truck Alliance) — every time we chat, roughly half the time or more we're exploring our own spiritual growth. And He Xiaopeng (Chairman of XPeng). I didn't invest in XPeng because he particularly understood car-making. It was because once he told me, "I don't want my child to ask me what I do, and I can only answer, I'm the founder of a mobile browser." The fundamental reason I invest in them is that these founders' passion and belief echo in me.

Anyong: How do you see into someone's heart?

Han Yan: Only when you allow yourself to be imperfect, vulnerable, can you see others' authenticity. Be your true self. In 2008, when I first entered the industry, I wore a suit and tie every day because the most powerful people in this industry were old men. Back then, if someone said I was young, I'd take it as an insult. Now I can face myself with complete ease. Instead, I'm more grateful that among GPs I'm still relatively young — youth has what elders cannot possess: time.

Anyong: We once reviewed twenty years of RMB fund development in China and found that no matter how impressive the GP, they were ultimately making various choices around "survival." Has this changed?

Han Yan: I'll answer with a number: in recent years, I've personally invested tens of millions into Heart Capital. This is clearly not for survival — it's for the meaning of life in the next 20 years. VC today has entered a more differentiated stage. Those who can survive now must have more底气 [bottom-line confidence]. That底气 includes capability, financial strength, and also heart power — otherwise you won't survive.

Anyong: In previous public remarks, you mentioned missing Didi, Meitu, and Kuaishou. Is Heart Capital your way to prove yourself in the future?

Han Yan: I don't need to prove myself. Of course, I've missed many deals. But even when I invested well — XPeng, Full Truck Alliance — was that because I'm great? No, it's because I was lucky enough to join the game. Among these great companies, the investor's contribution is at most 1%. But investing still has meaning in life. The meaning lies in having the fortune to co-cultivate life's temple with excellent peers.

Anyong: Last question — I still want to ask, in these years when everyone thinks it's hard, what do you find hardest?

Han Yan: Let me tell you about a scene that's replayed in my mind in recent years. Shortly after Shanghai's lockdown ended, when everyone around was getting COVID, I accompanied my parents to Longhu Mountain in Yingtan, Jiangxi. That day there were only ten people on the entire mountain. Can you imagine? Bright sunshine, birds singing, flowers fragrant — no other sounds at all, but with family, hope, and love. In that moment, I suddenly felt deep珍惜 [cherishing]. The power of love can transform grief and pain into gratitude and curiosity. So you've asked me several times what's hardest? My answer is: understanding the world with a heart of love.

Image source: Doubao AI