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China’s StepFun Restructures Offshore Setup Ahead of Planned Hong Kong IPO

Prime Highlights 

  • StepFun is dismantling its offshore red-chip structure ahead of a planned Hong Kong IPO.  
  • The move follows tighter Chinese regulatory scrutiny on offshore incorporation models used for listings.  

Key Facts 

  • StepFun is a Shanghai-based AI startup founded in 2023 by former Microsoft executive Jiang Daxin.  
  • The company’s investors include state-linked Shanghai funds and technology giant Tencent Holdings.  

Background 

Chinese artificial intelligence startup StepFun is restructuring its corporate setup to remove its offshore incorporation framework as it prepares for a planned Hong Kong initial public offering, according to sources familiar with the matter. 

The Shanghai-based company is unwinding its red-chip structure, which previously involved offshore registration through the Cayman Islands, in response to tighter regulatory scrutiny from Chinese authorities over overseas-listed Chinese firms using offshore holding structures. The move is expected to help StepFun align with new regulatory guidance as it advances its Hong Kong listing plans. 

Sources said StepFun decided an onshore corporate structure would better suit its shareholder base because the company has strong backing from state-linked investors. Its investors include funds linked to Shanghai municipal and district governments, along with private investors such as Tencent Holdings and Qiming Venture Partners. 

StepFun, which former Microsoft executive Jiang Daxin established in 2023, has become one of China’s top AI startups that specializes in developing large language foundation models. The company’s AI solutions have achieved market success through its collaboration with OPPO, which develops smartphones, and Geely, which produces automobiles. The Step 3.5 Flash model has become one of the most popular AI models used on the OpenClaw AI agent platform. 

The restructuring reflects broader changes in China’s technology sector as companies adjust to stricter listing requirements while seeking to benefit from strong investor demand for AI and semiconductor listings in Hong Kong. More than 530 companies had filed for Hong Kong listings by last month, following a strong IPO market in 2025. 

Other Chinese AI firms, including Moonshot, are also reviewing whether to alter their offshore structures under the revised regulatory environment.