China's HSG is in preliminary discussions with investors to raise at least $1.2 billion for its first early-stage dollar fund after its split, focusing on investments in AI, healthcare, and consumer sectors.

HSG has been led by Shen Nanpeng since 2005. This fundraising is still in the early communication stage, and details regarding the final fundraising amount, first closing date, duration, management fees, core investors, or specific investment regions have not yet been disclosed.

In addition to the early-stage dollar fund, HSG is also evaluating the establishment of a growth fund and a renminbi fund, but the launch times, target sizes, and fundraising progress for these two types of funds have not been determined.

Sequoia Capital previously split its operations in the U.S. and Europe, China, India, and Southeast Asia into independent entities; the China team subsequently adopted HSG as its English brand, continuing to manage its venture capital and growth investment business under this independent brand.

HSG has invested in Chinese AI companies such as Yushu Technology, MiniMax, and The Dark Side of the Moon. The proposed dollar fund will enable it to continue participating in early financing for high-valuation AI, healthcare, and consumer companies with foreign currency funds.

Dollar LPs in China's primary tech market face variables such as geopolitical issues, data security, exit channels, and renminbi exchange rates. The outcome of HSG's fundraising will test whether it can maintain the trust and allocation willingness of overseas institutional funds after the split from the Sequoia brand.

In market mechanisms, the early-stage dollar fund can acquire equity and board influence when company valuations are low and technology routes are not yet determined, and can follow up with growth funds, renminbi funds, and industrial capital for continuous co-investment. Beneficiaries are Chinese AI, healthcare, and consumer startups that need international capital, recruitment, and global business resources; the pressured side is local VCs that lack a dollar LP network and find it difficult to provide long-term multi-currency support. If overseas LP risk appetite declines, HSG may rely more on renminbi funds, industrial capital, and the local exit market.

Source: Public information