Hangzhou, China-based Tunlan Investment launches $1.6B Xiong'An Global Blockchain Innovation Fund, with $400M+ coming from the Hangzhou city government
Context & Ripple Effects
This fund lands mid-wave: within weeks, Huobi and Tianya announced a $1B vehicle for domestic blockchain startups, and by July the city of Nanjing answered with its own $1.48B blockchain fund explicitly designed to lure firms to relocate. What distinguishes Tunlan's vehicle is the anchor LP — over $400M from the Hangzhou city government makes this municipal balance-sheet money, not just exchange or private capital.
Seen from 2025, it reads as an early prototype of the structure Beijing later scaled up nationally with its ~$138B state venture capital guidance fund: government seed capital steering private money toward designated technology sectors.
First-order effects
- Chinese blockchain startups gain a $1.6B domestic funding source whose largest single backer is a city government, giving Hangzhou-based and relocating teams a local capital route at a time when crypto-adjacent financing was otherwise dominated by exchanges like Huobi.
- Hangzhou converts itself into a named destination for blockchain firms, putting it in direct competition with Nanjing, which launched a comparable fund months later with relocation incentives attached.
Second-order effects
- Other municipalities face pressure to match Hangzhou's and Nanjing's fund sizes or lose the bidding war for blockchain companies, turning city-level industrial policy into an arms race of ever-larger sector vehicles.
- Private investors such as Huobi gain government co-investors that de-risk domestic blockchain bets, shifting deal flow toward funds that can pair exchange expertise with municipal backing.
Third-order effects
- If the pattern holds, city-level sector funds mature into the layered state-guided VC system China formalized with the ~$138B national guidance fund — government LPs becoming a permanent structural layer of Chinese tech finance rather than a one-off subsidy.
- Blockchain funding in China migrates from crypto-native backers toward state-anchored vehicles, prefiguring the split Ant Group later embodied by serving overseas Web3 clients through ZAN while domestic capital flows through policy-aligned funds.
The trend: Chinese technology finance is evolving from ad-hoc municipal blockchain funds into a tiered state-guided venture system, with city governments as first-mover LPs and Beijing later consolidating the model at national scale.