CAS Star Ventures' early-stage venture capital arm has closed its final fundraising round, securing $573 million (4.08 billion yuan), setting a new benchmark for hard tech investment funds in China.
The milestone comes at a time when the domestic venture capital market has shown signs of slowdown, underscoring both investor confidence and the strategic importance of early-stage hard tech ventures.
"This is not only a sign of market recovery, but also the result of our proactive planning," said Mi Lei, founding partner of CAS Star, in an interview with TMTPost Focus. The fund had initially completed its first closing on July 16 with 19 limited partners (LPs), including the National SME Development Fund and Shanghai Guotou Pioneer AI Fund.
The final close added $195 million (1.39 billion yuan) from new investors such as Taibao Capital's Changhang Mother Fund, Haidian District Zhongguancun Science City Science and Technology Growth Fund, and Ant Group. By leveraging Sci-tech bond capital to increase its contribution ratio, the fund emphasized a differentiated strategy: "investing early, in smaller projects, for the long term, and in hard tech."
CAS Star's LP structure has been significantly upgraded to a diversified configuration combining "national-level fund of funds + insurance capital + industrial capital + university capital + regional capital." According to Mi, this structure mitigates reliance on a single capital source while enhancing stability during market fluctuations—key to sustaining a long-term hard tech investment strategy.
The fund has been highly active since its first closing. By the end of November, CAS Star had made decisions on 46 investments, with over 90% of them in the first two funding rounds. Investments have focused on artificial intelligence, biotechnology, and disruptive technologies. In the first eleven months of 2025, the fund approved 88 investments totaling nearly $420 million (3 billion yuan), demonstrating an ability to maintain robust deployment even as capital markets tighten.
"The global tech industry is converging towards projects that are ultra-microscale, ultra-macroscale, highly complex, or operating in extreme environments," Mi said. "The scale of funding required and the length of investment cycles have both increased, raising the bar for early-stage hard tech funds."
Mi highlighted two key shifts shaping hard tech investing in 2025. First, a growing consensus between China and the U.S. has emerged on strategic technology directions. The U.S. "Genesis Mission" plan prioritizes six areas: advanced manufacturing, biotechnology, critical materials, nuclear fission and fusion, quantum information science, and semiconductors/microelectronics.
China's 15th Five-Year Plan similarly emphasizes frontier sectors such as quantum technology, controllable nuclear fusion, embodied intelligence, aerospace, and synthetic biology.
"These sectors require massive R&D investments, carry high technical barriers, and demand substantial capital," Mi said. Angel-round financing for nuclear fusion and embodied intelligence projects has reached hundreds of millions of yuan (tens of millions of USD), while AI foundation models, quantum computing, and commercial aerospace projects demand similarly large commitments. "Without a sufficiently large fund, it's difficult to participate in these leading-edge projects," Mi noted.
Second, a clearer picture of IPO prospects has led institutional investors to concentrate their capital on core tracks, driving polarization within the hard tech investment market. According to Zero2IPO Research Center, AI-related investments accounted for over 50% of all hard tech financing in the first half of 2025, while quantum and nuclear fusion sectors, though smaller in deal volume, saw more than 100% year-on-year growth in funding.
To bridge the gap between scientific discovery and market-ready products, CAS Star has expanded its presence in Beijing and Shanghai. In Beijing, the firm has established a benchmark incubator in optoelectronics, providing a public technical service platform for photonic chip packaging and testing.
In Shanghai, CAS Star is deploying an "advanced incubation plus deep incubation" model, supporting research teams with funding and operational guidance before formal company formation.
The incubator has successfully launched nine projects, including Huake Lengxin, originating from Huazhong University of Science and Technology, and a two-dimensional semiconductor materials project from Fudan University. Both have benefited from deep incubation support, leading to intellectual property transfers, team formation, and early-stage financing.
"Technological progress is rarely linear; it ebbs and flows between peaks and troughs," Mi said. "As long as the technology is reliable, its value will manifest over the long term. Early-stage investment requires patience and a focus on long-term exits rather than short-term market fluctuations."
Mi emphasized that China will continue to benefit from its engineering talent for decades. "Previously, our advantage lay in demographic dividends. Today, engineering talent is the core driver of innovation," he said, citing successes from companies such as Huawei, BYD, CATL, DeepSeek, and DJI. CAS Star aims to identify, nurture, and empower "1,000 hard tech champion companies" in China, allowing investors to share in the coming wave of innovation dividends.
To foster collaboration between academia and industry, CAS Star has also launched the "Cape of Good Hope Science Salon," hosting discussions on quantum computing, nuclear fusion, precision medicine, and synthetic biology. The initiative seeks to break down barriers between researchers and entrepreneurs, facilitating the identification of potential founders and disruptive technologies.
"True strategic resolve comes from a commitment to long-term trends," Mi said. CAS Star's core investment strategy remains focused on five major hard tech tracks: materials, energy, information, space, and life sciences. By combining investment, incubation, and ecosystem building, CAS Star aims to empower entrepreneurs to lead China's next wave of technological innovation.
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