The DeepSeek Financing Story

@Jing Liu

DeepSeek financing news is everywhere by now.

What we already know, elsewhere won't rehash. Below are some untold stories and details we've learned.

The Legendary Four-Hour Meeting

First, that investor meeting — the one passed around by word of mouth as "the four-hour meeting."

In mid-May, DeepSeek organized this virtual session over Tencent Meeting. By then, the investor lineup was more or less set, with two slots per firm.

Wenfeng Liang spoke for the first hour. The remaining three hours were Q&A, with investors asking questions and Liang responding.

Legend has it that one CVC investor spent a full ten minutes on his questions alone: a long self-introduction, followed by three lengthy questions. The atmosphere grew awkward at one point — not hard to imagine. People whispered among themselves, asking who this person was.

But Liang didn't seem bothered, earnestly answering every question. Though after the second answer, he momentarily forgot what the third question was and had to ask the investor to repeat it.

Before this, even most of those who had already committed capital hadn't met Liang in person. This was their first real exchange with him. After the meeting ended, many were left with a lingering sense of something more — a feeling that stayed with them.

Liang's memorable lines and spirit began circulating in the market.

Restraint and AGI

Wenfeng Liang isn't an exceptionally articulate person, nor does he speak quickly. But several quotes from that meeting are often recalled (paraphrased, the original wording may vary slightly):

"We have no fame and no pull. We are a group of very ordinary people."

"The narrative I love is: ordinary people doing extraordinary things. For DeepSeek, our core priority is ensuring team stability — this matters more than money or resources. This is our biggest risk, and our biggest challenge."

"Those who want 5% will lose to those who want 1%. Those who want 1% will lose to those who want 0.1%."

"We will only do things related to advancing intelligence. We won't do anything else."

"AGI is a big enough thing. Everything else is just process."

Through all four hours, Liang kept returning to the same themes: the sole pursuit of AGI; less is more; restraint.

From 5 Billion to 1.5 Billion

Formal fundraising kicked off around April this year. There was reportedly a "fund whitelist": institutions with real capital capacity and strong brands.

Initially, DeepSeek required a minimum commitment of 5 billion RMB, no syndication of shares, and a pure RMB structure.

Against this backdrop, one investor figure who was initially rumored as a certain participant but ultimately didn't make the cut — widely speculated to be because he had once tried to sell allocation to Middle Eastern LPs.

But in China, there are very few market-oriented funds capable of writing a 3 billion RMB single check. So some VCs repeatedly pushed: could they participate through multiple fund vehicles?

In the end, the minimum fund commitment was lowered to 1.5 billion, and fundraising structures became more flexible.

There was also talk that participating institutions preferably shouldn't have invested in other large language model companies. This was likely impossible — the contradiction being obvious: first-tier funds that haven't touched LLMs are rare.

At the investor meeting, Liang also expressed that DeepSeek was willing to help other companies — including other LLM companies, provided they didn't poach his people.

Monolith

Monolith appeared on investor lists relatively early. What changed was the number: initially 1.5 billion, ultimately 3 billion.

One explanation for the shift ties to allocation adjustments with Guozhi Investment, freeing up some capacity — the latter's 980 million RMB figure suggesting an intentional rounding down below the 1 billion threshold.

Either way, making bold bets is distinctly Xi Cao's style. He proved this once before with Moonshot AI.

Monolith is likely the youngest VC among participants in this round.

Loyal Valley Capital

Loyal Valley Capital may be the most surprising name on the final list.

Many interpreted this as eagerness to get in, given they hadn't invested in any Chinese LLM company during the wave. But as we understand it, they had in fact invested in Moonshot AI, somewhere between $6-10 billion valuation. Relative to their fund size, however, the amount was limited.

One market reading suggested that Loyal Valley Capital's founder, with his secondary-market background, had natural ties to High-Flyer Quant. But in reality, quantitative and fundamental investing in the secondary market are practically separate circles, even different value systems.

As we understand it, this investment came together not only through Lijun Lin and his partner Chunyan Ye, but also through the efforts of a newer investment hire.

Loyal Valley Capital was also among the earliest VCs to start conversations with DeepSeek.

Could DeepSeek Be HSG and Hillhouse's Biggest Miss?

Now for the most surprising part of this deal.

Initial rumors had Hillhouse participating, and committing 5 billion. Lei Zhang had reportedly told friends multiple times that since 2025, he and Liang had been in regular contact, and that he'd visit Liang's home when in Beijing.

But this gradually shifted to: Hillhouse wouldn't participate, but Lei Zhang might invest personally. Reasons cited ranged from Hillhouse's fundraising timeline to regulatory concerns.

In the end, neither Zhang nor Hillhouse appeared on the list.

HSG, meanwhile, was almost from the start considered unlikely to participate. The most circulated version cited Neil Shen's concerns about US LPs. We've asked multiple people close to HSG, and they broadly confirmed this. Other explanations have circulated too.

The upshot: HSG and Hillhouse — two institutions that seemed impossible to exclude — both ended up absent. A top lawyer told us that with a RMB-structured company, hiding participation is theoretically impossible.

Among established VCs, only IDG invested.

So someone threw a question back at us: Could DeepSeek become HSG and Hillhouse's biggest miss?

Hard to say. But as we understand it, DeepSeek may not stop at this single round.

100 Institutions and Individuals

The investor list shows only 10 participants. But elsewhere did a quick look through fund structures, and found considerably more actual parties involved.

For example, the external CVC of the CATL ecosystem — Puquan Capital's backers include: Xiamen and Ordos local government capital, CATL-related entities, and the National Green Development Fund.

Several IDG Capital funds involved in this transaction show clear insurance capital characteristics. Ping An Life is the largest LP, with a very high proportion of the 3 billion. IDG also served as the primary channel for national funds like the National Social Security Fund and the National SME Fund to participate. Additionally, entities related to Nongfu Spring's Zhong Shanshan and Septwolves' Zhou Shaoxiong are involved.

Monolith's current LPs are primarily Zhejiang and Shanghai local government capital, plus listed companies like By-Health and Yanghe Brewery.

Furthermore, iHealth (Andon Health) is also among participants. iHealth is in fact an LP behind numerous GPs.

A rough estimate, with shallow penetration and simple deduplication: approximately 100 institutions or individuals participated in this DeepSeek financing round.

The Top Demand: No Poaching

DeepSeek's investment terms won't be detailed here. One addition: whether for major tech companies or VC funds, Liang's most important requirement was — don't poach DeepSeek people, or encourage them to start their own ventures.

"China's Largest Listed Company"

If we view this as a pure investment, what kind of bet is DeepSeek?

One participating investor once worried aloud: could this be an overly consensus investment? In investing, consensus outcomes tend to be mediocre.

But for DeepSeek, it's hard to say that. Or rather, we can't understand it through a simple investment lens. Whether for its significance to China's AGI industry, or its symbolic meaning.

As one investor put it: "They're doing all this with enormous goodwill. He seems to be telling us: this is how the world should be."

So some hesitated, while others believed — "there's no reason not to invest." If, as some expect, an IPO materializes, could DeepSeek become the largest listed company on China's A-shares?

Quiet Ambition

In following DeepSeek's financing, one striking impression: for most people, DeepSeek was an unexpected answer. Even the most competitive investors never thought it would open up to fundraising.

So as mentioned, most well-known investor figures only connected with the company recently. Objectively, Liang had long avoided meeting investors.

When financing news broke, many institutions didn't even try to pitch for allocation. Yet in the end, some got tickets through claimed synergies, some through conviction, some through brand alignment, some simply through effort.

elsewhere tried asking some investors about the deal. Most didn't want to discuss it. Transaction sensitivity was only part of it; more seemed to be a self-aware desire to maintain quietness, born of feeling honored to be part of it.

One investor said he treasured every document throughout the process, hoping to frame them someday. Another repeated twice the sixteen characters from the DeepSeek V4 preview release: "Not tempted by praise, not frightened by slander. Follow the path, correct oneself."

Cover image: Joseph Mallord William Turner, Whalers, 1845, Metropolitan Museum of Art