Business
China’s Start-Up Funding: A Slow Start with Potential Rebound on the Horizon
Venture capital in China continues to be sluggish, yet a rebound may be on the horizon this year. Despite the ongoing lull in startup financing in China, the capital accumulated in the first six months already surpasses half of the total for 2023, hinting at a possible resurgence.
Investment in Chinese startups continues to be at a minimal level. However, the capital accumulated in the initial six months surpasses half of the total for 2023, indicating a possible rebound, as per information from Mergermarket, a source for mergers and acquisitions intelligence.
Funds gathered nationwide hit a high of US$132.7 billion in 2021, but subsequently fell to US$67 billion and US$45.4 billion in 2022 and 2023, respectively. This information was shared at the AVCJ Private Equity Forum China held in Beijing the previous week.
Between the months of January and June of the current year, Chinese startups managed to secure a total of US$25.7 billion in funding. However, compared to the time before the pandemic, the market is still not as robust. There are, nonetheless, hopes for a market recovery within the year.
"China's funding may experience a minor rebound this year, following a two-year downturn since 2021," stated Yiqing Wang, the Asia-Pacific managing editor at Mergermarket, during an event in Beijing.
Another noticeable shift is that the influence of funds denominated in dollars has significantly lessened. Funds based in dollars secured only US$2.6 billion, which made up a mere 2.5 per cent of the overall total in the first six months of 2024, a drastic drop from the 44 per cent they held in 2021, according to data from Mergermarket.
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