Asia Tech Wire (July 9) -- HongShan, a Chinese venture capital firm separate from Sequoia Capital, has raised a $2.5 billion fund to invest in tech startups, according to Chinese media outlet Yicai.

The media outlet confirmed from people familiar with the matter that HongShan has newly raised a RMB fund of 18 billion yuan ($2.5 billion) for investment in Chinese tech startups.

The venture capital firm did not respond to the latest fundraising, but said the round was completed earlier this year.

HongShan's latest RMB fundraising had participation from the Hangzhou municipal government as well as state-owned insurance companies, the report said.

Industry insiders said HongShan has the opportunity to enter at a lower cost amid China's tech startups facing funding constraints, difficulties in going public and plummeting valuations.

But some professionals also analyzed that the challenge for investors is also greater.

In June last year, Sequoia Capital announced a global spin-off, making its businesses in the U.S. and Europe, China, and India/Southeast Asia operate independently under different brands.