Monolith Management recently completed final closings for its USD VC Fund II and RMB VC Fund I, raising a combined $488 million (approximately ¥3.5 billion).
Mid-2025 saw Monolith's hedge fund also complete a new round of fundraising, continuing its expansion. The four-year-old firm now oversees total assets exceeding ¥10 billion.
This achievement stands out in today's challenging venture capital landscape—both new funds were significantly oversubscribed, receiving about 160% of initial targets totaling $630 million. However, Monolith deliberately scaled back the final size to maintain disciplined investment practices.
**Four Years, ¥10B: Restraint Meets Growth** Founded in November 2021 by ex-Sequoia China partner Cao Xi and former Boyu Capital secondary markets partner Tim Wang, Monolith debuted with a $500 million hedge fund that shook the investment community. Today, it has evolved into a comprehensive asset manager.
The USD VC Fund II secured commitments within one month, with existing LPs reinvesting over 100% of their capital. Despite 160% oversubscription, Monolith chose to cap the fund—a rare move in current markets.
Its maiden RMB fund also impressed, raising ¥1.4 billion against an ¥800 million target. Notably, it attracted predominantly market-driven LPs with minimal government-backing requirements—a feat in China’s state-capital-dominated fundraising environment.
**Barometer: Year-End Market Shifts** Monolith’s success contrasts with broader trends. While Q1-Q3 2025 saw RMB fund raises grow 18.3% by count and 8.0% by value, USD funds continued declining.
Its dual-currency close coincides with renewed overseas interest in Chinese AI assets, as European and Middle Eastern LPs reconsider allocations. Firms like Lightspeed China, Qiming Ventures, and BlackAnt Capital are similarly pursuing new USD funds.
**Strategy: Research-Driven AI Focus** Monolith’s "thematic, research-led" approach has concentrated on AI since inception, spanning foundational models, software infrastructure, embodied intelligence, and hardware. Portfolio highlights include MoonDark (LLMs), AI education firm AIDance, pool-robot maker SwimX, and exoskeleton developer Jike.
Its RMB fund prioritized AI chips and computing infrastructure, with chipmaker MetaX already IPO-bound—potentially delivering strong returns despite late-stage entry. Another case, Unitree Robotics, reflects Cao Xi’s early-stage conviction in "backing exceptional companies amid seismic shifts."
**Valuation Gap: China’s AI Opportunity** Monolith’s fundraising underscores the relative undervaluation of Chinese AI versus U.S. peers. Since 2022, top Chinese AI firms—whether in LLMs (DeepSeek), robotics (Unitree, Zhiyuan), or hardware—trade at fractions of global valuations. For instance: - Chinese LLM leaders (excluding DeepSeek) average ~$4B valuations vs. Thinking Machines Lab’s $10B seed round. - Embodied intelligence firms like Figure AI command $39B valuations—28x higher than domestic counterparts.
With Hong Kong’s 2025 IPO boom and rapid technological advances, this gap presents compelling opportunities for global LPs.
**New VC Era Dawns** Each industrial revolution—internet, mobile, now AI—reshapes venture capital. China’s next-gen VCs, having navigated early challenges, are finding their footing.
Monolith’s hybrid hedge fund/VC model differentiates it. Its team shares real-time, transparent research on global public companies, fostering cross-market insights. Preqin’s 2025 rankings placed Monolith fourth globally among $250M-$490M AUM managers, while Cao Xi earned #39 on Forbes’ Midas List for early bets like Kuaishou and Unitree.
As fresh capital deploys, Monolith reaffirms its philosophy: "Backing a few transformative companies beats spraying investments." The market now watches whether this distinctive approach will yield more world-changing AI bets.
*(This article utilized AI tools for data compilation and analysis.)*