Chinese subsidiaries of American venture capital firms are investing money from U.S.-based funds into Chinese space startups, even as the Pentagon warns of Beijing’s growing activity in the space arena, according to data reviewed by TechCrunch. 

The data, collected by PitchBook, includes information on past limited partners and investments of the Chinese units of Sequoia Capital, Matrix Partners and Lightspeed Venture Partners. Space industry investments represent a very small but notable portion of these firms’ portfolios, with Sequoia Capital China and Lightspeed China investing in two companies each, and Matrix China investing in eight. Startups that have landed funding include companies working on launch, satellite manufacturing, and Earth observation. 

According to recent reporting from The Wall Street Journal and Politico, the White House is considering new screening requirements on American investment flowing to foreign-based technologies that could be sensitive to national security, like semiconductors, though it’s unclear whether space technologies would also be considered as part of a future order. But one investor, who asked to remain anonymous, citing co-investments with Sequoia Capital, told TechCrunch that the stakes are high.

As tensions build, Silicon Valley’s Chinese affiliates invest in sensitive space tech by Aria Alamalhodaei originally published on TechCrunch