China’s Tech Capital Winter Deepens After VC Deals Tank
- Number of Chinese-based VCs drop by more than half to 345
- Funds raised by China-focused VCs plummet by nearly 60%
The financial district Lujiazui in Shanghai.
Photographer: Johannes Eisele/AFP
China-focused venture capital firms struggled to raise capital in the first half, culling the number of funds and presaging more pain to come for the country’s cash-strapped startups.
Funds that invest in the world’s No. 2 economy only managed to raise $3.7 billion as of June 15, down nearly 60% from a year earlier, according to research consultancy Preqin. The number of Chinese-focused vehicles that managed to complete their funding also fell 61% to 21 in that period. That helped slash the total number of existing Chinese-based venture capital funds by more than half to 345 as of mid-June, Preqin data showed. The total amount of deals stood at about $20 billion at half time, roughly 40% of 2019’s full-year total.