IPOs in 8 Months, Behind Them 8 Years of Long-Distance Running in the Dark
Eight years of long-distance running in the dark — that is a vivid footnote to China's hard-tech investing.
Three portfolio companies going public within eight months, with a combined market capitalization exceeding RMB 100 billion. RMB 2 billion in new funds raised in 2024, with the first close of the latest fund completed. In this "capital winter," HyT Capital, based in Shenzhen, has delivered an enviable track record.
What makes it even more remarkable is that all three IPO companies are industry beacons in scarce hard-tech sectors. InnoScience has become the world's first IDM leader to achieve mass production of 8-inch silicon-based gallium nitride, with a post-IPO market capitalization exceeding HKD 50 billion. Kema Technology is China's leading advanced ceramic materials company, currently valued at RMB 26 billion. Hanshow Technology, positioned at the intersection of IoT, listed on the ChiNext market as the first digital store solutions provider, with its market capitalization reaching RMB 30 billion on its first trading day.
If you factor in how early HyT Capital entered and how much weight it placed on these bets, the significance of these three IPOs rises further. Among the three companies, Kema Technology opened only one financing round before its IPO, and HyT Capital was one of the main financial investors (excluding CVCs) in that round. Hanshow Technology was backed as early as 2017, with two additional follow-on investments. InnoScience was backed in 2019 at a high-risk stage when the market had not yet reached a consensus, with additional investments in two subsequent rounds. After their successful IPOs, the return multiples have been substantial.
HyT Capital has thus become a "phenomenal" focal point — not just because of the numbers, but because of what the story says about time. In these three investments, there was no hype. From the first investment in 2017 to the IPOs in 2025 — eight years of long-distance running in the dark — this is a vivid footnote to China's hard-tech investing. HyT Capital is a microcosm of a broader group of hard-tech VC firms. Capital is transforming from a tool for financial arbitrage into an engine for industrial upgrading, and the real value creators are ferrying progress across the long river of China's tech rise.
Hard Tech Long-Termism Breaks Through
HyT Capital was founded in late 2015. At the time, mobile internet and sharing economy investments were booming, and the expansion of the NEEQ (National Equities Exchange and Quotations) to the national level had sparked a wave of PE mania. While capital was piling into short-term arbitrage opportunities, HyT Capital chose a harder and longer path — hard tech, which required long-term commitment, high risk, and high barriers.
This likely has to do with the backgrounds of the two founders. Sun Yelin was a senior executive at a tech giant, having spent 17 years witnessing the power and impact of China's tech companies, and was convinced that investing in "difficult but right" hard tech was the only meaningful path. Yang Huajun is a serial entrepreneur, having had two ventures/technologies acquired by well-known listed internet companies, with a strength in going from 0 to 1. This combination of "industry + entrepreneurial" backgrounds is quite different from the typical financial background of VC firm leaders, making them "atypical investors."
Yang Huajun once told ChinaVenture about the fundraising process for HyT Capital's first fund: "We had never worked at a so-called 'white-horse fund' and had no track record. What our LPs expected from us was a deep understanding of the industry from a different angle, and the ability to invest in some different kinds of projects."
With no historical baggage and unconstrained by conventional rules, while many RMB funds were still struggling over the 5+2 investment horizon, HyT Capital had already raised a ten-year fund. In a highly competitive primary market, it stayed true to the industrial laws and fundamental logic of hard-tech investing. Fortunately, a number of forward-looking institutional LPs chose to believe in this approach and have supported HyT Capital across multiple fund vintages.
In the years when the registration-based IPO system was in full swing and WeChat feeds were flooded with VC firms' IPO announcements, HyT Capital kept a low profile. In fact, by the numbers, it once lagged behind other mid-generation VCs in terms of IPO count. But when the tide went out, HyT Capital began to stand out.
Hanshow Technology, which went public in March, first filed its IPO application on June 28, 2023. On that same day, 30 companies submitted their applications to the Shenzhen Stock Exchange's ChiNext board. In the months that followed, most withdrew or had their applications terminated. Hanshow became the first among that batch to pass the ChiNext review process in 2024, and remains the only one from that cohort to eventually go public.
Through this capital winter, HyT Capital has shown remarkable resilience. Behind its strong track record lies a patient calibration of the rhythms of technology, market, and policy — a breakthrough in "long-termism." In hard tech, risk is not the enemy. The more complex the system, the wider the moat.
Investing in Industry Leaders
HyT Capital sets a high bar for its investments — it backs only "industry leaders," not just companies that are "IPO-ready." As founding partner Sun Yelin put it: "We have turned down projects that could go public by conventional logic but would not become industry leaders. We aim to back innovators who can truly reshape the industrial landscape."
Looking at the three IPO projects together, some commonalities emerge: high ceiling in their respective tracks, clear core competitive advantages, and dominant market share in their niches. Companies like these are largely immune to policy and capital market cycles.
Sun Yelin once said: "We are willing to take huge risks to accompany the birth of a great company." In HyT Capital, one can see the spirit of adventure that once defined Silicon Valley's VC pioneers.
Take InnoScience as an example. Those who follow semiconductor investing may remember that in the gallium nitride sector, the first project to attract capital attention was not InnoScience. At the time, another gallium nitride chip company using a Fabless model — with foundry manufacturing — enjoyed greater consensus among capital and raised more funding. Conventional thinking suggested that a Fabless model meant the company could focus on chip design, with less capital intensity and lower risk, giving a startup a better chance to succeed.
In contrast, InnoScience's founder decided early on to pursue the IDM route and mass-produce 8-inch wafers — a choice that amplified the complexity by several orders of magnitude and required massive capital, deterring many investors. For a long time, the company was a project that attracted attention but also significant controversy, with few institutions willing to commit.
But HyT Capital saw precisely the value in "8-inch" and "IDM model." These revolutionary, leading-edge projects often lit up Sun Yelin's eyes. He recalled to ChinaVenture: "When we came across this project, we were very excited. Before gallium nitride had reached industrialization, integrated design and manufacturing offered the fastest iteration cycle between product application and process improvement. Industry division of labor only happens when the sector scales up significantly. This showed that the founder had strong strategic vision — and this industry needed a true integrator to lead its birth."
Short-term difficulties, in the long run, are the other side of the coin — they become competitive moats: faster process iteration, better product performance, lower costs, and larger-scale production capacity.
InnoScience's subsequent development validated this judgment. It reached heights that competitors could not match, becoming the world's first to achieve 8-inch gallium nitride mass production, building the world's largest gallium nitride power semiconductor manufacturing base, and ranking first globally in gallium nitride power semiconductor shipments — making it one of the few semiconductor segments dominated by a Chinese company.
Of course, it is hard to say that the investors who missed InnoScience did not understand the IDM logic. It is just that "difficult but right" things are truly difficult — a near-impossible challenge. In a time when risk appetite in the primary market has dropped sharply, it is not surprising that most choose not to take that risk.
The Passion of Tech Idealism and the Rationality of Serious Investing
If one were to ask what the deepest gene is that HyT Capital has inherited from its industry background, the answer might be a dual belief in both technological development and business growth.
Based on its insights into technology and industry, HyT Capital announced in early 2023 its vision of the world over the next 10 to 20 years, along with a four-layer cyclical structure for intelligent technology investing — semiconductors, infrastructure (compute), intelligent terminals, and intelligent applications — forming a closed loop that connects the technology chain with commercialization scenarios.
Three years ago, Sun Yelin was already describing a digital twin world: "In the future, a large number of smart objects will operate independently. They will be equipped with rich-media sensors, transmitting data through 5G — an invisible high-speed channel — to the cloud brain, a brain that has developed reasoning capabilities similar to the human cerebral cortex. These physical smart objects will have invisible digital twins in the cloud, equipped with super-intelligent brains that can mobilize near-infinite computing power, making our physical world more intelligent." At the time, such descriptions seemed somewhat science-fiction. But over the past two years, with the rapid rise of large models and embodied intelligence, these visions are being validated.
To some extent, HyT Capital may seem to carry the label of "tech idealism." However, in the latter half of our long conversation with Sun Yelin, he repeatedly emphasized another term — "serious investing."
When a technology cycle arrives, and an exciting future vision unfolds before you, it is easy to get carried away. "The longer you stay in this industry, the more you see the richness and complexity of the landscape. The more you see, the more reverence you develop, and the less you dare to invest recklessly. What we can do is treat every investment with utmost seriousness. On one hand, we diversify risk through portfolio construction. More importantly, we identify variables that remain unchanged through time cycles, repeatedly examine the root causes across short, medium, and long cycles, and gain a thorough understanding of the people involved. After that, we accept all contingencies. In the case of these recently listed companies, we were simply fortunate enough to have seen through a few essential, cycle-transcending factors — and to have met the right founders. Over 99% of the complexity and environmental changes in a company's development were resolved by the founders and their teams." Sun Yelin told ChinaVenture. The key to forming these judgments lies in: vision-driven macro-level thinking, mid-level analysis of technology trends and timing, repeated simulations of competitive dynamics, analysis of customer value, and micro-level access to critical information.
From this perspective, HyT Capital is actually a quite cautious VC. When investing in a sector, it typically looks three steps ahead, thinks through about two of them, and then takes one step forward.
Investment Is a Never-Ending Evolution
Serious investing has led HyT Capital to develop a unique set of values and operating principles over time.
"We have been narrowing our investment scope and raising our standards. For example, we have moved from investing in general tech companies to backing only those with high technological content and broad commercial potential — especially projects in future-defining technologies with large addressable markets and wide moats. Similarly, we have moved from relatively loose requirements on sectors and founders to what we call the 'Double First-Class' standard: first-class sector, first-class founder. None of this was in place on Day 1. It was developed step by step over long cycles, through clear feedback on both successes and failures. We don't think we've fully arrived yet — there will be more iterations as more feedback comes in," Sun Yelin emphasized repeatedly.
When they invest in underperforming projects or miss good opportunities, they analyze the failures to find areas for improvement. Ray Dalio's "pain + reflection = progress" is a growth path the HyT Capital team believes in. As the firm's 2025 New Year message put it: "Occasional success may not reflect our true capability. Long-term, repeatable, and stable success usually does. Failure is a valuable asset — it contains our deep-seated ignorance. Stay diligent in thinking and deep in reflection, and perhaps we can reduce that ignorance by one notch."
It is this humility and composure that give them empathy and resonance with entrepreneurs navigating extreme survival conditions.
"VC investors discover, incubate, and accompany the entrepreneurs of the future. They are society's scarcest resource — survivors of a near-impossible journey, the best of the best. We cannot expect ourselves to be better than them, but we can at least get close to them, understand them, and walk with them step by step in reality, letting go of illusions," Sun Yelin said. Those driven by long-term vision — neither blindly chasing short-term gains nor merely obsessed with technology, but balancing idealism with pragmatism — are the people HyT Capital most wants to back.
Indeed, HyT Capital and its founders are like organizational evolution partners. As Luo Weiwei, founder of InnoScience, recalled: "Throughout the company's development, HyT Capital has been a mentor and friend, helping us define strategic direction with its insights into industry trends, turning capital into a participant in industrial evolution rather than a bystander."
"Broad vision, meticulous execution" — perhaps that is the best annotation for the growth path of a VC firm.
In the spring of 2025, the explosive rise of DeepSeek brought new excitement to the venture capital community. It suddenly became clear that the "hard tech" investment model that had prevailed for years had run into a problem: why did China's most promising AI large-model company get collectively missed by China's VC industry?
An obvious fact is that there are no low-hanging fruits left in hard tech. What remains are high-altitude challenges and unknown risks. Mediocre investment strategies will no longer work. Future success belongs to capital that combines patience with boldness. Patient capital means being willing to hold steady through the long cycles of technological breakthroughs, unmoved by short-term temptations. Bold capital means daring to explore uncharted territory and finding certainty within uncertainty.
We believe that as China's hard tech continues to push toward the global frontier, more VCs like HyT Capital will emerge — combining the depth of patient capital with the edge of bold capital — to shape the innovators of the next era and become a driving force in industrial transformation.
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