StepFun has raised more than RMB 5 billion (USD 700 million) in a Series B+ funding round, according to PEdaily. The deal ranks among the largest private financings in China’s artificial intelligence sector so far this year.

The round drew a mix of state-owned funds, industrial players, and financial investors. New participants include the Shanghai State-owned Capital Investment (SSCI) Leading Fund, China Life Private Equity Investment, PDVC, Xuhui Capital, Wuxi Liangxi Fund, Xiamen ITG Group, and Huaqin Technology. Existing backers Tencent, Qiming Venture Partners, and 5Y Capital also took part.

Founded in Shanghai in 2023, StepFun last raised capital just over a year ago, completing a Series B round in December 2024 with participation from SSCI, Qiming Venture Partners, Tencent, and 5Y Capital.

The latest raise comes as China’s AI sector shows signs of consolidation. Several leading AI developers, including Z.ai (Zhipu AI) and MiniMax, have turned to public markets, while private funding has increasingly concentrated around a few perceived frontrunners. Data from Tracxn show that Chinese AI firms closed fewer funding deals in 2025 than a year earlier, though average deal sizes rose. Large technology companies such as Alibaba and Tencent have also become more selective, appearing to favor in-house development over external investments.

StepFun’s round stands out for the range of its investors:

  • China Life Private Equity Investment, the investment arm of China Life Insurance, is known for its conservative approach to risk, making its participation noteworthy.
  • Xiamen ITG Group’s investment is reportedly its first in a large-model developer, signaling intensifying competition among local governments to gain AI exposure.
  • Huaqin Technology’s involvement points to potential hardware-software integration, as the smartphone original design manufacturer supplies brands including Oppo and Vivo and produces devices such as tablets, laptops, wearables, and automotive electronics.

The company has also expanded its leadership team. Yin Qi, CEO of Megvii and founder of Afari, has been appointed chairman of StepFun. He joins CEO Jiang Daxin, chief scientist Zhang Xiangyu, and CTO Zhu Yibo as the company accelerates its work in large model development.

StepFun’s strategy centers on Step 3, its flagship large language model, alongside development of multimodal systems and cloud-edge integration. Step 3 is designed to process text and visual inputs simultaneously, a capability known as multimodal reasoning, and is positioned around high decoding efficiency and broad hardware compatibility. Benchmark results have prompted comparisons with domestic peers, including DeepSeek’s R1.

Beyond cloud-based models, StepFun is expanding into applications that integrate AI directly into devices. In the automotive sector, Geely’s Agent OS system, installed in vehicle models such as the Galaxy M9, is powered by StepFun’s end-to-end voice large model. StepFun expects its models to be deployed in more than one million vehicles this year, according to PEdaily.

StepFun’s end-to-end voice large model, enables emotionally intelligent voice interactions, adapting tone and content based on user emotion and intent.

The company has also explored vision-language-action models that link perception and decision-making, and it continues to delve into on-device AI. Its Step-GUI series, released in November 2025, is described as capable of achieving state-of-the-art performance while maintaining strong general capabilities when running directly on-device.

Taken together, the scale of StepFun’s latest raise and the breadth of its backers underscore a shift in China’s AI funding landscape, where capital is increasingly flowing to a smaller number of companies seen as having the technology, leadership, and partnerships to compete at scale.