Tencent has an unrealized profit of 30 billion yuan.
Another IPO return feast is unfolding.
Today (September 11), Shanghai Enflame Technology Co., Ltd. (hereinafter referred to as Enflame) officially landed on the Sci-Tech Innovation Board, with an issue price of 142.18 yuan per share. Its opening price surged by more than 190%, and its market value once exceeded 200 billion yuan, closing at a market value of about 170 billion yuan on the first day of trading.
Founded in Shanghai, Enflame's founder Zhao Lidong graduated from the renowned EE85 class of Tsinghua University. In 2018, he and his former AMD colleague Zhang Yalin joined the entrepreneurial wave of domestic AI chips, gathering a long list of investors along the way.
The presence of Tencent in the list is particularly impressive — after eight years of heavy investment, it has become Enflame's largest external shareholder, with the floating profit of this single investment exceeding 30 billion yuan.
Enflame Goes Public, Tencent Reaps Huge Returns
The story starts with the two founders.
Zhao Lidong holds a bachelor's degree in electronic engineering from Tsinghua University and a master's degree in electrical and computer engineering from Utah State University in the United States. He has worked in Silicon Valley for more than 20 years and served at AMD for many years, responsible for the R&D of CPU/GPU/APU and multiple related core IPs, and participated in the establishment of AMD's China R&D center.
Zhang Yalin graduated from the Department of Electronic Engineering of Fudan University. He used to be one of the main heads of AMD's global chip R&D. He successfully led the development and mass production of multiple world-class chips at AMD's Shanghai R&D center, with rich practical experience in engineering and productization.
Witnessing the surging momentum of domestic computing power, the two veteran chip practitioners hit it off immediately and decided to join the entrepreneurial wave of China's AI chip industry. In March 2018, they founded Enflame Technology in Shanghai with a clear division of responsibilities: Zhao Lidong serves as Chairman and CEO, in charge of strategy, financing and business operations; Zhang Yalin serves as General Manager, in charge of product planning, R&D and production operations.
Since then, Enflame has risen rapidly. Over the past eight years, it has independently developed and iterated four generations of architectures and five cloud AI chips, building a complete product system covering AI chips, AI acceleration cards and modules, intelligent computing systems and clusters, as well as AI computing and programming software platforms, ranking in the first echelon of domestic cloud AI chip manufacturers.
In this process, the role Tencent plays is far beyond that of an ordinary investor.
As early as July 2018, Tencent led the RMB 340 million Pre-A round of financing for Enflame, and continued to increase its investment in almost every subsequent round of financing, becoming an important strategic investor behind the company. According to the prospectus, Tencent holds more than 20% of Enflame's shares, making it the largest external shareholder.
More critically, Tencent is also a core business customer of Enflame. Since 2019, the two sides have expanded cooperation from small-scale pilots to large-scale full-scenario deployment, and Enflame's products have been widely applied in Tencent's core AI scenarios. The prospectus shows that Tencent contributed more than 80% of Enflame's sales revenue in 2025, and was its largest customer in all periods covered by the report.
Having accompanied Enflame Technology all the way, Tencent continued to heavily invest in Enflame's IPO. In the final strategic placement before Enflame's listing, Tencent was allocated approximately 1.7471 million shares, with an allocated amount of about 248 million yuan, and a lock-up period of up to 36 months.
From the Pre-A round to the IPO round in eight years, Tencent's investment has finally paid off. Simple calculation shows that Tencent's book floating profit exceeds 30 billion yuan.
Those Who Stayed the Course Have Finally Reaped Super Returns
Enflame Technology's financing journey has left a deep impression on the public.
Less than a month after its establishment in 2018, Enflame obtained seed round financing, with a star-studded list of investors: UFG Capital (a fund under Wu Yuefeng), ZhenFund, DT Capital, Yunhe Capital, and Shanghai Science and Technology Innovation Group under Shanghai State-owned Assets Operation Co., Ltd. (hereinafter referred to as Shanghai Science and Technology Innovation Group), etc.
Among them, Shanghai Science and Technology Innovation Group is the earliest Shanghai state-owned capital force that supported Enflame. Dai Yedong, Deputy General Manager of the Group's Project Investment Department, recalled to PEDAILY that shortly after Enflame was established, Zhao Lidong and Zhang Yalin came to Shanghai Science and Technology Innovation Group to conduct project roadshows. The seats for the first round of financing were very tight, and the share was only "grabbed" with great difficulty — Shanghai Science and Technology Innovation Group invested 1 million yuan at a valuation of about 100 million yuan.
ZhenFund was one of the three lead investors in Enflame's seed round. "In 2018, I first met investor Gu Manman at ZhenFund's Shanghai office, then went to Beijing to meet Wang Qiang (co-founder of ZhenFund) and Anna Fang (founding partner of ZhenFund). After chatting with each of them for half an hour, they made a decision very quickly and offered me the most friendly TS in the industry that I had ever seen at that time," Zhao Lidong recalled their first meeting in a public interview.
"Lidong is one of the top entrepreneurs I have ever met," Anna Fang said in an interview about this investment. Starting from the angel round, ZhenFund has continuously participated in the two earliest rounds of investment of Enflame, which is one of its firm choices based on the "invest in people" philosophy for more than a decade.
Soon, Tencent also joined. In July 2018, Tencent led the RMB 340 million Pre-A round financing of Enflame, which opened up the financing situation for Enflame, and it completed almost one round of financing every year: in 2019, RMB 300 million Series A financing led by Redpoint Ventures; in 2020, about RMB 700 million Series B financing led by Wu Yuefeng; in 2021, about RMB 1.7 billion Series C financing led by CPE, CICC Capital and Chunhua Capital; in 2022, the China Integrated Circuit Industry Investment Fund participated in the Series C+ round financing.
Guofang Venture Capital also appears in the long list of investors. The connection between the two sides began in 2019, when Enflame was just established and was still in the Series A financing stage, and its products and market needed time to be verified. However, the Guofang team saw the founding team's persistence in the full-stack technology route, as well as their determination to deepen core technologies and truly deliver products to customer scenarios. In December 2020, Guofang participated in Enflame's Series C financing through the Yangtze River Delta Industrial Fund under its management.
By the end of 2022, the capital market was in a downturn, the IPO pace was tightened, and chip financing became difficult. At this critical moment, Shanghai International Group stepped forward — in September 2023, Enflame completed the Series D financing of over RMB 2 billion, with Guofang Venture Capital leading the investment with RMB 630 million. After this round, Guofang Venture Capital became an important investor of Enflame, holding a total of 3.73% of the company's shares.
About a year later, Enflame Technology's Pre-IPO round of financing was about RMB 2.7 billion, jointly led by Shanghai Integrated Circuit Industry Investment Fund under Shanghai State-owned Assets Operation Co., Ltd. (hereinafter referred to as SDIC IC) and Tencent. Among them, the second phase of the SDIC IC Fund contributed RMB 300 million. So far, from the decision of "investing 1 million yuan after only one meeting" in the angel round to accompanying Enflame to successful IPO today, this Shanghai state-owned capital has completed an investment covering both ends of the "smile curve" on Enflame — making small investments in the early stage and investing in certainty in the later stage. This curve exactly outlines the complete growth trajectory of a Shanghai hard technology enterprise from its germination to expansion.
Yunmu Capital has also witnessed the rise of Enflame. At the end of 2018, the Yunmu team got in touch with Enflame Technology through the Tsinghua alumni network and industrial network, and invested in the company's Series A round before the chip tapeout. In the following eight years, from the Series A round to the IPO, Yunmu Capital and its related parties have invested a total of more than RMB 1 billion in Enflame, of which the Yunmu Capital team invested more than RMB 100 million. For Yunmu Capital, which is not a large-scale institution, this is already a heavy investment.
After eight years of entrepreneurship, Enflame Technology has raised a total of nearly 100 billion yuan in the primary market. According to the prospectus, Wu Yuefeng holds about 5.71% of the shares, Guofang Venture Capital holds about 3.73%, Yuntai Investment holds about 3.71%, Redpoint Ventures holds about 3.32%, funds under Shanghai State-owned Assets Operation Co., Ltd. hold about 1.64%, and Cowin Capital, IDG Capital, Haisong Capital, Yunmu Capital, etc. all hold shares.
With the ringing of Enflame's IPO gong today, a return feast kicks off. Those investors who once accompanied the enterprise to "sit on the cold bench" have finally ushered in their own moment of super returns.
All these once again prove that: No one can predict the direction of the tide, but the gift of time will never be absent.
This article is from the WeChat official account "PEDAILY" (ID: pedaily2012), written by Zhou Jiali, authorized for release by 36Kr.