DeepSeek nears $12 billion in funding ahead of 2027 IPO
The Hangzhou AI lab that spent three years living off its founder's hedge fund is now lining up serious outside money before going public
DeepSeek is close to raising at least $12 billion in fresh funding before it goes public in 2027, according to Bloomberg.
The Hangzhou-based AI lab is preparing for a potential listing on Shanghai’s STAR Market. The capital raise would arrive as the company builds out the financial plumbing a public offering requires.
The details
The money is coming in layers. DeepSeek closed its first external funding round in June 2026, raising approximately $7.4 billion.
That round gave the company a post-money valuation of over $50 billion. Founder Liang Wenfeng put in approximately $3 billion of his own assets.
DeepSeek is now finalizing talks on another round. It is valued at around 50 billion yuan, roughly $7.4 to $7.5 billion.
The pricing on that second round is the eye-catcher. It reportedly values DeepSeek at about 500 billion yuan before the new money goes in, or roughly $74 to $75 billion.
The revenue story helps explain why. As of September 2026, DeepSeek reported an annualized revenue run rate of $1 billion, more than double its previous figures.
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Much of that growth came from DeepSeek’s API business, which lets developers plug its models into their own products. Those price increases ranged from 2.3x to 4.5x, and the API unit posted an 82.9% gross margin.
From hedge fund side project to IPO candidate
DeepSeek was founded in 2023 as a spin-off from High-Flyer, the hedge fund run by Liang. High-Flyer bankrolled the lab on its own for three years, with outside investors only let in during 2026.
The company has brought on CITIC Securities as lead underwriter and appointed a new chief financial officer.
DeepSeek’s models have gained traction that rivals US labs, despite American export restrictions on semiconductor technology. The company’s response has been to run its models on domestic Huawei hardware.
The company has also leaned into open-source releases and research.
What this means
For investors, DeepSeek is shaping up as a test case for how public markets will price Chinese AI. A $1 billion run rate and an 82.9% API margin give it real numbers to sell.
Moving from a post-money valuation above $50 billion to a pre-money figure around $74 to $75 billion is a big step in a short window.
Running on Huawei chips insulates DeepSeek from further US export curbs. That same positioning ties DeepSeek’s fortunes to the state of US-China tech relations.
The things to watch between now and 2027 are straightforward: does the second round close at the reported valuation, does the $1 billion run rate keep climbing, and does the API business hold its margins once the price increases fully settle in.