SCHEDULE: DCM Funds Reduce Stake in QuantaSing Group to 21.4% Following Significant Share Dispositions

Sentiment:

Beneficial Ownership Update 7 July 2025 1:18 PM

DCM Ventures China Fund and its affiliated entities have significantly reduced their beneficial ownership in QuantaSing Group Ltd, selling approximately 1.5 million American Depositary Shares (ADS) and decreasing their aggregate stake by over one percent to 21.4%.

Worse than expectedThe document indicates a decrease of over one percent in the aggregate percentage ownership by a significant institutional investor group (DCM Funds and affiliates). While the sales were profitable for the funds, a reduction in stake by a major holder can be perceived as a negative signal by the market regarding the company's future prospects or the investor's long-term commitment.

Summary

This Amendment No. 2 to Schedule 13D updates the beneficial ownership of QuantaSing Group Ltd by DCM Ventures China Fund (DCM VIII), L.P., DCM VIII, L.P., DCM Affiliates Fund VIII, L.P., DCM Investment Management VIII, L.P., DCM International VIII, Ltd., and individuals Matthew C. Bonner, F. Hurst Lin, and Andre G. Levi (collectively, the "Reporting Persons").
The filing reflects the disposition of Class A ordinary shares by Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII, resulting in a decrease of over one percent in the aggregate percentage ownership previously reported.
As of June 30, 2025, the Reporting Persons collectively beneficially own 24,370,389 Class A ordinary shares, which are represented by 8,123,463 American Depositary Shares (ADSs), constituting 21.4% of the outstanding Ordinary Shares.
On June 25, 2025, the funds sold 79,332 ADSs (237,978 Ordinary Shares) at $9.2065 per share, totaling $730,370.06.
On June 26, 2025, an additional 108,742 ADSs (326,226 Ordinary Shares) were sold at $8.6348 per share, for an aggregate of $938,965.42.
On June 27, 2025, a substantial sale of 1,311,926 ADSs (3,935,778 Ordinary Shares) occurred at a weighted average price of $8.0597 per share, totaling $10,573,682.34.
The total aggregate sales across these three days amounted to 1,500,000 ADSs (4,500,000 Ordinary Shares) for a total of $12,243,017.82.
The Reporting Persons acquired their initial preferred shares in April and June 2018 at prices ranging from $0.1800 to $0.568621807 per share, which converted to Ordinary Shares upon the Issuer's IPO.
Further purchases of ADSs were made on January 24, 2023, at $12.50 per ADS, and in March 2024 at prices around $4.0974 to $4.1539 per share.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative. While the selling funds realized a profit on their disposition, the significant reduction in stake by a major institutional investor group is generally viewed unfavorably by the market, as it may signal a lack of conviction in the company's future growth or a strategic shift by the investor.

Positives

The Reporting Persons executed significant sales at prices ranging from $8.0597 to $9.2065 per share, which are substantially higher than their initial preferred share acquisition prices of $0.1800 and $0.568621807 per share, indicating a profitable exit for a portion of their investment.
The sales were also at higher prices than the March 2024 open market purchases (around $4.10 per share), suggesting a favorable market condition for the disposition.

Negatives

The disposition of over one percent of QuantaSing Group's outstanding shares by a significant institutional investor group could be perceived negatively by the market, potentially signaling a reduction in confidence or a shift in investment strategy by these key holders.
The sales occurred at declining prices over the three-day period, from $9.2065 on June 25, 2025, to a weighted average of $8.0597 on June 27, 2025, which might indicate selling pressure or a less favorable market for large block sales.

Risks

The reduction in beneficial ownership by a major institutional investor group could lead to negative market sentiment and potentially impact the company's share price.
The Reporting Persons reserve the right to further increase or decrease their holdings, which introduces uncertainty regarding future share price movements based on their investment decisions.

Future Outlook

The Reporting Persons intend to continue evaluating QuantaSing Group's financial condition, prospects, and their investment interests on an ongoing basis. They explicitly reserve the right to change their intentions at any time, including increasing or decreasing their holdings through open market or privately negotiated transactions.

Industry Context

This filing primarily details a change in beneficial ownership by a venture capital firm and its affiliates in QuantaSing Group Ltd. It does not provide information directly related to broader industry trends or competitive landscape, focusing instead on the investment activities of the Reporting Persons.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Termination of Rights	Certain rights under the Amended and Restated Shareholder's Agreement, including information and inspection rights, preemptive rights, and rights related to director appointment, automatically terminated upon the closing of the Issuer's initial public offering.	2023-01-24	Reduces the influence and specific contractual rights of the Reporting Persons over the Issuer's operations and governance post-IPO, aligning with typical public company governance structures.
Indemnification Agreement	Frank Hurst Lin, as a director of the Issuer, along with other directors, entered into an indemnification agreement providing for indemnification against costs, charges, expenses, liabilities, and losses incurred in connection with litigation or proceedings.	N/A	Provides standard protection for directors against liabilities arising from their service, which is common practice in corporate governance to attract and retain qualified board members.

Related Party Transactions

The Amended and Restated Shareholders' Agreement, dated December 20, 2022, between the Issuer and certain investors (including Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII) provides for registration rights, including demand, Form F-3/S-3, deferral, and piggyback registration rights.
Lock-Up Letters and a Lock-Up Side Letter were entered into by the Reporting Persons, other existing shareholders, and executive officers/directors with the Issuer and underwriters, agreeing to a 180-day lock-up period after the public offering date.

Stakeholder Impact

Shareholders: The significant reduction in stake by a major institutional investor could lead to concerns about the company's future outlook and potentially impact share price.
Management: The continued evaluation of the Issuer by a large investor group implies ongoing scrutiny of performance and strategic direction.

Next Steps

The Reporting Persons will continue to evaluate the Issuer's financial condition, results of operations, and prospects.
The Reporting Persons may, at any time, increase or decrease their holdings in the Issuer.

Key Dates

Date	Description
04/23/2018	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII entered into Share Subscription Agreements to acquire Series B preferred shares.
06/07/2018	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII entered into Share Subscription Agreements to acquire Series C preferred shares.
12/20/2022	Amended and Restated Shareholder's Agreement dated, entitling parties to registration rights.
01/24/2023	Preferred shares held by Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII converted to Ordinary Shares in connection with the Issuer's Offering; funds also acquired 400,000 ADSs (1,200,000 Ordinary Shares) in the aggregate at $12.50 per ADS.
11/17/2023	Original Schedule 13D filed.
02/14/2025	Amendment No. 1 to Schedule 13D filed.
03/26/2024	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII purchased ADSs in an open market transaction at $4.1396 per share.
03/27/2024	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII purchased ADSs in an open market transaction at $4.1539 per share.
03/28/2024	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII purchased ADSs in an open market transaction at $4.0974 per share.
06/25/2025	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII sold ADSs in an open market transaction at $9.2065 per share.
06/26/2025	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII sold ADSs in an open market transaction at $8.6348 per share.
06/27/2025	Main Fund VIII, Side Fund VIII, and Affiliates Fund VIII sold ADSs in an open market transaction at a weighted average price of $8.0597 per share.
06/30/2025	Date used for calculating outstanding Ordinary Shares (114,114,919 shares) for percentage ownership.
07/07/2025	Date of signing for the Schedule 13D Amendment No. 2.

Keywords

QuantaSing Group, DCM Ventures, Schedule 13D, beneficial ownership, share disposition, institutional investor, SEC filing, ADS, Class A Ordinary Shares

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