Venture capital investments in China surge to record US$31 billion

Venture capital investments in China hit an all-time high last year despite a global slowdown, with over US$31 billion pouring in as venture capital firms sought to invest in the growing number of innovative businesses in the country.

According to KPMG’s fourth-quarter Venture Pulse report, the US$31 billion came through more than 300 rounds of investment last year, and compares to US$26 billion though 513 rounds in 2015.

“Investors in Asia are shifting their investment focus. While there has previously been a lot of attention paid to online-to-offline (O2O), the second half of 2016 saw investors more focused on artificial intelligence, robotics and big data. There is also increased focus on fintech, education and health care related startups,” said Philip Ng, partner and head of technology for KPMG China.

Venture capitalists in Beijing invested US$18.5 billion, more than half of the total.

Many provincial governments in China have also started to invest in companies, after Beijing identified entrepreneurship and innovation as the country’s new growth engines early last year.

Provinces such as Hubei announced a US$81 billion fund for investments focused on diversifying the job base in the fourth quarter of last year, and will invest funds through venture capital companies such as Sequoia Capital and CBC Capital.