In a record funding round for China’s satellite internet sector, domestic start-up SpaceSail has raised around 7 billion yuan (US$1 billion) to accelerate the buildout of a low-Earth-orbit (LEO) network designed to compete with Elon Musk’s Starlink project. Known officially as Shanghai Spacecom Satellite Technology, the operator of China’s Qianfan constellation completed its Series B round on Monday, according to a notice published on the website of the Shanghai United Assets and Equity Exchange. A total of 18 investors joined the deal, including state-backed investor Shanghai Alliance Investment and hard tech-focused venture fund CAS Star. With the newly raised capital representing around 13.94 per cent equity, the company’s valuation has reached about 50 billion yuan, according to the notice. The fundraising comes as China steps up efforts to build large-scale LEO satellite networks that can provide broadband internet and direct-to-device connectivity, challenging Starlink’s dominance of the satellite internet market. Founded in 2018 in Shanghai, SpaceSail has rapidly expanded its footprint in orbit. The company launched 54 satellites in 2024, brought its total to 108 in 2025, and currently operated 238 Qianfan satellites after its latest deployment in early July, according to Shanghai’s State-owned Assets Supervision and Administration Commission (Sasac). Despite its rapid growth, SpaceSail remains far behind SpaceX’s Starlink, which said it operated more than 10,000 satellites and served over 12 million subscribers. SpaceSail was expected to narrow the gap by leveraging fresh capital and expanding domestic launch capacity, with plans to eventually deploy a global constellation of more than 14,000 satellites. The funding represented a “landmark event” for China’s commercial space sector as it moved towards large-scale deployment, Chang Liang, a committee member at the Innovation Academy for Microsatellites Chinese Academy of Sciences, was quoted as saying by state-backed Shanghai Securities News in a report on Wednesday. SpaceSail has also begun making inroads internationally. Brazilian telecommunications regulator Anatel earlier this year approved the company to provide satellite communications services, according to Shanghai Sasac’s website. Similar deals were being explored in Malaysia, Thailand and Kazakhstan, according to local media reports including Shanghai Securities News. The fundraising coincides with technical breakthroughs across China’s commercial space industry. On Tuesday, private aerospace firm LandSpace executed the world’s first ground-based, leg-assisted recovery of an orbital booster – a key step towards lower-cost reusable launches. Domestically, SpaceSail competes with state-owned China Satellite Network Group, which is building another mega-constellation known as the Satellite Internet Series.