China’s Gaorong Ventures invests US$30 million in HK's HashKey

Gaorong Ventures has invested US$30 million in the operator of Hong Kong’s biggest licensed crypto exchange, HashKey, a rare example of a Chinese venture powerhouse dabbling into the US$3 trillion digital asset arena.

Gaorong — the early backer of Chinese internet firms including Meituan (3690) and PDD — invested in HashKey at a pre-money valuation above US$1 billion, according to people familiar with the matter. The valuation remains little changed from a year ago, when Hashkey raised US$100 million and reached unicorn status, the people said, asking not to be identified discussing private information.

Crypto bets by Chinese investors are growing despite Beijing banning the asset class in 2021. Still, it’s rare for the country’s venture capital firms to make direct investments into a sector known for price volatility and speculation. Tencent (0700) recently invested in crypto market maker Wintermute Trading. Hongshan, formerly known as Sequoia China, is an investor in web3 outfits like Animoca Brands.

A HashKey spokesperson said Gaorong’s US$30 million investment was at a post-money valuation of close to US$1.5 billion. A Gaorong spokesperson declined to comment.