Ian Goh, founding partner of venture capital firm 01VC, has been looking at cross-border opportunities since 2015. As a Singaporean who started working in China in 2001, Southeast Asia was among the first markets that Goh was looking into for potential opportunities.
“What I did was bring Chinese entrepreneurs or what’s worked in China and replicate that in Southeast Asia. We did about 10 deals over Southeast Asia, even in Latin America, even in India during that time,” said Goh during a panel discussion at DealStreetAsia’s Asia PE-VC Summit 2025 in Singapore last week.
But soon he found out that the Southeast Asia market was not there between 2016-2018. One bet—a Jakarta-based TikTok clone—collapsed when the real TikTok entered the market just six months after the investment, proving blind replication couldn’t compete.
Fast forward to now, the cross-border pivot has been part of the major shift underpinning many of the VC firms in China, riding on the wave of Chinese entrepreneurs and business go-global or what is known in mandarin as “Chuhai”.
“What we’re seeing since 2019 to today, we’re seeing a lot of Chinese companies, whether it’s in robotics, logistics, or FinTech sectors, building infrastructures not just for the China market but the global market. We are seeing that happen in all portfolio companies,” said Goh.
Propelled by the dual pressures of strict pandemic restrictions that choked off domestic opportunities and a recent downturn in fundraising, Chinese GPs and their portfolio have rapidly expanded their global reach since 2020, chasing fresh avenues for growth far beyond China’s borders.
But geopolitics, unproven exits, and localization hurdles continue to challenge Chinese VCs’ overseas strategy—despite early wins and IPO hopes. Success hinges on localizing teams and leveraging Chinese expertise, with firms betting long-term gains will outweigh current volatility, panelists shared in a discussion titled Chinese GPs on ‘go-global’ pursuit despite headwinds.
The drivers behind
Top-tier Chinese venture firms have been establishing local offices and affiliates in Singapore since at least 2022, positioning the city-state as a gateway for Southeast Asian investments.
But recent data from DealStreetAsia reveals a sharp decline in Southeast Asia investment activity by Chinese general partners (GPs).
Between July 2020 and June 2025, only nine Greater China-based venture capital firms with a Southeast Asia focus reached final close—a 35.7% drop compared to the 14 firms that did so from the first half of 2018 to the first half of 2024. Additionally, the total value of these final closes fell by 19% over the same periods.
Beyond the region, they’ve also turned to the Middle East for fundraising—though geopolitical tensions there create both opportunity and risk—while simultaneously exploring deals in Japan, Europe, and North America as part of their global expansion strategy.
Separately, the US and Europe have emerged in the eyes of Chinese and Hong Kong GPs since the start of the year. Chinese and Hong Kong private equity and venture capital investment into the US and Europe (including the UK) has accelerated sharply in 2025, with $9.6 billion deployed between January 1 and June 17—surpassing the $7.1 billion total for all of H1 2024, according to S&P Global Market Intelligence data.
This follows a broader rebound in outbound Chinese PE flows to Western markets that began in 2024 after a sluggish 2023.
The spate of data signifies how Chinese GPs’ global expansion has been a study in contrasts — shifting priorities and uneven success across regions. Such developments come against the backdrop of China’s private investment market grappling with valuation adjustments, geopolitical uncertainties, sluggish exits, and macro challenges.
Investing in China is competitive, according to Fred Li, managing director at Gobi Partners. The ability to help portfolio firms to go global has been one of the key selling points that motivates founders to take the cheque from Gobi, Li shared.
Unproven exits, unfolding bets
Yet, part of the limited partner (LP) concerns lies in the fact that most of the ‘chuhai’ investments were made in the past three to four years, and the outcomes of whether those investments will be successful or not remain unfolding.
William Zhao, partner at BAI Capital resonated with that, saying that the exit channel for certain emerging markets has been unproven.
“But what we see in our portfolio is that businesses across some of the key sectors such as fintech and technology services, have grown to become sizable businesses with profitability. Some of them are preparing for IPOs in Nasdaq or US exchanges,” said Zhao, adding that a number of those firms will be hitting IPOs during 2026-2027.
It could be just a matter of time for the results of the overseas and cross-border investments to unfold as they go public in the next few years. But Zhao believes that there has been a shift within LPs as their Chinese GPs pursue the go-global strategy.
“Some LPs will challenge that. Why you, right? Because you are not local, you are not really 24/7 in the market,” said Zhao. BAI Capital’s approach is to bridge the Chinese know-how to give its portfolio firms a competitive edge in the target market — from incubation, greenfield investments, to talent recruitment.
From country-focused funds to going beyond VC sweetspots
Chinese venture capital firms are adopting diverse global strategies, from country funds to cross-border innovation bridges.
With $1.6 billion of assets under management (AUM), Gobi Partners has raised 21 funds to date since its inception in 2002, according to its company website. Part of what sets it apart is the series of country-focused funds that the firm has raised including the likes of Indonesia-focused Gobi-Agung Fund; Philippine-focused Gobi-Core Philippine Fund; and Pakistan-focused Techxila Fund.
Gobi Partners’ Li believes that having a local strategy has been the key to build and nurture such a robust local LP network across the diverse markets. “I would say we take it as a mission to empower our LPs,” Li said.
“Because even for LPs themselves. They need an alliance. They want to be more powerful,” he added. That proved prescient as Gobi Partners recently in August joined the Hong Kong Investment Corporation (HKIC)’s delegation to Brunei and Malaysia to explore the cross-border opportunities.
HKIC is an investment firm wholly-owned by the Hong Kong government with a total of HKD 62 billion ($8 billion) in capital to deploy across various sectors to drive innovation and sustainable growth of Hong Kong.
In May, Gobi Partners also tied up with the HKIC to create the Patient Capital Strategic Fund, which seeks to groom local innovation from the university and to pool more international capital to invest into the local ecosystem. “We are not a huge fund, but we are small and beautiful enough, and we have the local infrastructure,” Li said.
With $3 billion in assets under management (AUM), BAI Capital invests in global companies with a China edge across fintech, entertainment, AI and supply chain sectors; and China-based companies across the consumer, healthcare, and technology sectors that are riding on the country’s structural transformation.
While Gobi Partners focuses on localized, country-specific strategies, BAI Capital adopts a different approach—positioning itself as a global fund that backs ambitious Chinese entrepreneurs expanding overseas, according to Zhao.
As one of the few investment firms connecting the know-how between China and Latin America, BAI Capital has set Mexico and Latin America as some of the markets that the firm prioritises.
For example, it has invested in multiple rounds of Stori since 2019. Most recently, BAI Capital, together with Hong Kong-listed Chinese auto finance firm Yixing Group, incubated MStar, an auto finance startup focusing on the Latin American market.
MStar’s rapid Latin America growth stems from Asia’s rising middle-class car financing demand and Chinese automakers’ global expansion. Zhao said BAI Capital replicated China’s mature financing model in Mexico, filling a local gap.
To overcome funding hurdles, he leveraged Asian capital, fueling quick market growth. He emphasized that success required more than typical venture capital—strategic resources, tailored solutions, and team building were key. “You have to do something beyond your typical sweet spots in venture capital,” said Zhao.
The roadblock? “Trump.”
For Steven Wang, founder and CEO of Highlight Capital (HLC), a global approach has been central to the private equity firm’s mission from the outset, driven by the inherently international nature of the healthcare sector.
With $3.8 billion under management, the healthcare-focused firm strives to invest in companies that boost manufacturing efficiency and improve human wellness. HLC has operations across Tokyo, Shanghai, Hong Kong and Boston, according to its website.
“We have made two deals in Indonesia. The majority of them are the Chinese major medical device companies doing joint ventures with the Indonesian local partners who run sales and distribution, and the Chinese partner bringing their technology and product design, which is much better in terms of proposition for the local market,” said Wang.
However, when addressing challenges facing the portfolio, Wang pointed directly to the impact of Trump-era policies.
Yet, he also highlighted new opportunities arising from shifting market dynamics. Wang said that over the past year, Highlight Capital had seized opportunities in the US biotech sector, where a funding drought and stalled IPOs had led to more attractive valuations. At the same time, the firm had successfully taken six companies public in China and Hong Kong, taking advantage of the region’s buoyant public market conditions.
Goh of 01VC is keenly aware of how geopolitical tensions can disrupt business, too. “The geopolitical tensions are here. We have one company that was mentioned by the House Select Committee on China. It was mentioned in Congress, but there was no ramification, but that was a wake up call for a lot of companies,” he explained.
He cited Tao Motor, a motorsports products manufacturer in 01VC’s portfolio, as a case in point. Although the company faced US sanctions last year, it still achieved a 23% revenue growth in the first half of 2025—even as its US revenue fell by 29% during the same period.
“Despite Liberation Day, we are seeing some of our portfolio companies are having increased revenues despite increased cost. The profitability was able to increase as well. So the ability to adapt with all this terrible geopolitics is one ability that we see from Chinese entrepreneurs,” Goh said.
Despite the resilience, Goh emphasizes that genuine globalization requires hiring and trusting local talent, not just familiar faces.
BAI Capital’s Zhao believes that focusing on the long term factors was key, especially by leveraging engineering talent and technical know-how to build products for large domestic markets that could eventually be exported globally.
He expressed confidence that the next generation of breakthrough companies, like another TikTok, Shein, DJI, or Insta360, would emerge from this approach. Ultimately, he dismissed current headwinds as mere noise when viewed through a long-term lens.
