Rejected by Liang Wenfeng

Some investors originally thought this deal was a sure thing.

Unexpectedly, DeepSeek began to screen all LPs. At the end of its Series B financing, multiple people close to the transaction told us that DeepSeek recently rejected a number of capital parties, including LPs with state-owned assets, non-listed company, and natural person backgrounds.

This level of strictness is not hard to understand. Everyone wants to invest in DeepSeek, but Liang Wenfeng needs to prevent equity from eventually flowing into unknown entities or triggering other potential risks.

"All news about DeepSeek's Series B financing across various channels has been suspended in the past two days." Some people involved in the transaction said that for now, they can only wait. Reports say DeepSeek recently held a highly confidential investor meeting, with Liang Wenfeng joining online.

In that case, the closing of DeepSeek's Series B financing will not be far away.

LPs Are Scrambling for DeepSeek's Share Allocation

Having worked in the financial industry for more than a decade, Gao Qiang (pseudonym) has never seen such a crazy project.

Recently, multiple LPs have submitted capital certificates with official bank seals to him to seek DeepSeek financing shares, and some have account balances of more than 4 billion yuan at a glance. "Now I'm somewhat numb seeing capital certificates showing billions of yuan lying in accounts, and even think it's quite normal."

There are so many inquiring LPs piling up that the capital cannot be invested out, which was unthinkable in the past.

In the long-standing ecosystem of the venture capital circle, LPs, as capital contributors, naturally have a certain demeanor of Party A, especially in those years when the market was cold. However, for the DeepSeek project, almost all LPs have lowered their stance — they just want to get in on the investment.

Regarding DeepSeek's Series B financing, there were early rumors at the end of August that it was about to close. But recently, multiple people involved in this transaction told us: It has not been fully closed yet, and this round of financing has been significantly oversubscribed.

Gao Qiang cited an example of a Zhejiang institution he is in contact with that is participating in DeepSeek's Series B financing, which said it has obtained a share of nearly 40 billion yuan and needs to complete the fund's signing and capital transfer before the Mid-Autumn Festival. Based on the pace of this transaction, he estimates that all funds will finish fundraising before the National Day holiday, and capital delivery will be completed in October.

As for the reason why it has not been closed yet, it is mostly stuck in the LP review process.

"Many LPs that were submitted have been rejected by DeepSeek." This also means that some share quotas will become vacant — so those investors who did not make a move before have reignited their hope.

As is known to all, DeepSeek has very strict standards for screening LPs. In its Series A financing, Liang Wenfeng already required to verify the identities of LPs participating in the financing, and this pickiness has continued in the Series B financing. LPs backed by state-owned assets, natural persons with small investment amounts, and non-listed companies may all be rejected in this screening.

Some GPs are worried that the qualifications of their LPs will not pass the review, so they submit all their LPs as backups.

After all, opportunities are fleeting. Gao Qiang mentioned that he has connected with nearly 10 well-known GPs in the market recently, and even if some of them can get share quotas, the quotas will be snatched away quickly.

New Faces

Between reality, speculation and eagerness, there is no lack of chaos. But such a hot project with a huge financing scale is almost naturally accompanied by high noise due to its high public attention.

Across the ocean, AI giant Anthropic completed a $65 billion financing in May this year, with a post-money valuation of $965 billion; OpenAI completed a $122 billion financing in March, with a post-money valuation of $852 billion.

In the sky-high financing feasts of these two companies, secondary information traps, SPV layered risks, and extremely tense capital transfer decision-making are also highly prevalent. So much so that in May this year, the two companies had to issue public warnings in person: they do not recognize any stock sales or transfers that have not been approved by the companies.

Many people are looking forward to the final scale of DeepSeek's this round of financing. "It is very likely to be oversubscribed by multiple times," a person involved in the transaction judged. According to previous reports, DeepSeek originally planned to raise 500 billion yuan in its Series B financing, with a target valuation of 500 billion yuan.

Previously, the market has circulated a rough list of investors for the Series B financing: in addition to some old shareholders from the Series A who will continue to participate, new investors including Stony Creek Capital, SMIC PE, Boyu Capital, CPE Yuanfeng, and Hefei State-owned Capital Investment Platform are also joining the negotiations. Among them, behind Stony Creek Capital and SMIC PE are industry chain giants such as GigaDevice and SMIC respectively.

We also noticed that some of the aforementioned negotiating parties have recently shown some preparatory actions for their funds.

Take Stony Creek Capital as an example. On August 31, Hangzhou Shixi Zhaoyi No.1 Venture Capital Partnership (Limited Partnership) was established with a registered capital of 27.85 billion yuan. Its contributors include Hefei State-owned Assets, Xinhua Metallurgical Group, Jinhua State-owned Assets, Giant Network, Zheshang Securities, Orient Securities, etc., as well as Lv Dalong, founding partner of Qingkong Ginkgo, who subscribed 120 million yuan.

Earlier in April, Shanghai Shixi Zhaoyi Zhixin Venture Capital Partnership (Limited Partnership) was established, in which GigaDevice contributed 400 million yuan, and Dongguan Trust, Shanghai Guotou Pilot, Lv Dalong and others are also on the list.

If these two funds are related to DeepSeek's financing, the composition of the LP lineup can be seen to a certain extent.

At the moment, DeepSeek is speeding up its listing process on the Sci-Tech Innovation Board — it plans to submit its application as early as the end of this year, targeting a listing in 2027. A person from a Shanghai CVC institution revealed that he has heard some exaggerated discussions in offline exchanges, such as people expecting DeepSeek's market value to reach 4.5 trillion yuan on the first trading day.

These crazy expectations make investors participating in this financing competition feel excited even if they place bets at a valuation of 500 billion yuan. But everyone seems to selectively ignore a fact: the more fully the pre-IPO valuation is realized, the thinner the safety margin when entering the secondary market, not to mention the existence of the lock-up period.

This is not a risk-free game.

This article is from the WeChat Official Account "Investment China" (ID: pedaily2012), written by Feng Yuchen, and republished with authorization from 36Kr.