Xiaohongshu, China’s fastest-growing social media platform, has secured new investment from foreign venture capital firm DST Global, valuing the company at $17 billion and marking a rare instance of overseas investment in China’s tech sector following Beijing’s regulatory crackdown.

As the Financial Times (FT) reports, the photo and video-sharing app, popular among urban women, arranged stake sales of existing shares to current and new investors in recent weeks. DST Global, founded by tech entrepreneur Yuri Milner, participated alongside Hong Kong-based HongShan (formerly Sequoia China) and Chinese private equity firms Hillhouse Investment, Boyu Capital, and Citic Capital.

Xiaohongshu’s user base reached 312 million monthly active users in 2023, representing a 20% increase from the previous year. According to the FT, this growth rate positions it as the fastest-growing large social media platform in China for that period.

The company’s financial performance has also improved significantly. The FT writes that Xiaohongshu reported revenues of $3.7 billion and a net profit of $500 million in 2023, contrasting with a $200 million loss on revenues of about $2 billion in 2022.

Unusually for the Chinese tech industry, Xiaohongshu has backing from both Tencent and Alibaba. This dual support makes it an unlikely acquisition target for either company, as they effectively hold veto power over a sale to a rival.

Per the FT, the platform’s valuation has fluctuated in recent years. At the peak of Chinese internet startup valuations in 2021, Xiaohongshu was valued at $20 billion. Its value dropped to $14 billion in late 2022 before rebounding to the current $17 billion.

Xiaohongshu is expanding its overseas business development team to target markets popular with Chinese tourists and attract more advertisers to the platform. The company has also offered to promote AI startups on its platform in exchange for equity.

Investors view Xiaohongshu as one of a small group of Chinese tech unicorns with potential for a successful initial public offering. However, the FT reports that the company’s wealth of consumer information could complicate any plans for an overseas listing, given Beijing’s restrictions on cross-border data sharing.