Chinese venture capital investment appears to be resurging as Qiming Venture Partners raised $3.2 billion across two funds. Its oversubscribed USD Fund VIII was closed at $2.5 billion, and in a yuan-denominated fund, it raised roughly $700 million, all directed at supporting tech, consumer, and healthcare sector startups. Overall, following the fundraising, Qiming now manages $9.4 billion over 18 different funds.

Quiming is quick to point out it did not reach that position overnight. Since it was founded in 2006, Quiming has backed over 480 companies from Xiaomi to Meiituan, and made over 180 exits. But it is not the only investment fund that sees improving prospects going forward.

As China launched a far-reaching crackdown on tech companies earlier this year, valuations across public and private markets were crushed, and venture funding in China plummeted. In the first five months of 2022, private equity and VC funds raised only $6.2 billion, a 90% decline from the year before, according to data from research firm Preqin. Startup investments were reduced by 40% to $34 billion.

Things have been looking up in recent weeks, however. Sequoia China raised $9 billion to invest in consumer and tech companies, and IDG Capital is positioned to raise roughly $900 million for a new China-focused fund which will draw upon existing investors. BlueRun Ventures China, reached the final close of its second dual-currency fund, raising over $817 million in May.

The main driver of the upswing is the prospect of finally exiting the Covid pandemic-related lockdown measures which came with China’s stringent “Zero Covid” policies. Thus far lockdowns and the threat of lockdowns have acted as an artificial force depressing China’s economy and valuations. If there is now an end to the lockdowns, and China’s economy can return to full production, investors can expect to see extensive opportunities to profit.

The only risk will be, if the virus returns, and how stringently the government responds if it does.