Shanghai-backed firm helps AI start-up Stepfun raise ‘hundreds of millions of dollars’

A Shanghai-backed investment vehicle has helped artificial intelligence (AI) firm Stepfun raise “hundreds of millions of dollars” in the start-up’s latest funding round, as more Chinese local governments extend support for the technology’s domestic development.

Fortera Capital, a private-equity firm under the Shanghai State-owned Capital Investment Co (SSCIC), led Stepfun’s recent series B financing, according to Fortera’s WeChat post on Monday.

Shanghai-based Stepfun, which was founded in April last year, will use the new funding to develop foundational AI models – focused on multimodal capabilities and complex reasoning – and strengthen the start-up’s consumer-oriented product portfolio, according to Fortera’s WeChat post.

The latest initiative by Shanghai’s municipal government reflects the city’s growing efforts to bolster technological innovation in strategically important industries.

In March, mainland China’s commercial and financial hub announced plans to set up a 100 billion yuan (US$13.8 billion) fund of funds to support start-ups in the fields of AI, biotechnology and semiconductors. A fund of funds pools capital into a broader portfolio of investment funds, rather than ploughing money directly into stocks, bonds or other securities.