- StepFun is on the verge of completing a new funding round of nearly $2.5 billion as it accelerates its push for a Hong Kong IPO.
- The company has dismantled its red-chip structure, a move considered a key preliminary step for a Hong Kong listing.
Chinese artificial intelligence (AI) startup StepFun is about to close a new funding round of nearly $2.5 billion, as the company accelerates its sprint toward a Hong Kong initial public offering (IPO).
The latest round has attracted investors including Huaqin, Longcheer, OmniVision, and ZTE, local media outlet China Star Market reported on Friday, citing people familiar with the matter.
In addition, the Hong Kong Investment Corporation (HKIC) has appeared on its latest shareholder roster, providing further endorsement for the AI rising star's Hong Kong listing.
The company completed its joint-stock restructuring in April this year in preparation for its Hong Kong debut, according to the report.
StepFun has also dismantled its red-chip structure, a move widely regarded as a crucial preliminary step for an IPO in Hong Kong, the report said.
A red-chip structure refers to an arrangement where a domestic Chinese enterprise establishes an offshore holding company, transfers domestic assets and equity offshore via shares or agreements, and raises funds by listing the offshore entity overseas.
This year, Chinese regulators have signaled a more cautious regulatory stance toward red-chip companies seeking to list in Hong Kong.
StepFun has been considering a Hong Kong IPO that could raise about $500 million, with a debut possible as early as this year, Bloomberg reported in February.
The Shanghai-based startup has held preliminary discussions with potential advisers regarding the share sale, though details including the fundraising size and timeline remain under evaluation, the report added.
The fundraising comes during an open window for Chinese AI firms to list in Hong Kong, following the successful debuts of rivals MiniMax and Zhipu AI on the city's bourse in January.
