China’s top private equity firm Hillhouse Capital, a major investor behind Big Tech firms like Tencent Holdings and Meituan , denied rumours of large-scale lay-offs on Wednesday amid a slowing economy and tougher fundraising climate for domestic start-ups and venture capital (VC) firms. Screenshots circulating on Chinese social media platforms on Wednesday claimed that Hillhouse had laid off staff across several teams, which the investor promptly denied in a one-line statement, calling it untrue gossip. The denial comes as Hillhouse’s portfolio has fallen in value this year. Among its major holdings, biotechnology stock I-Mab has plunged 80 per cent, Singapore-based tech firm Sea has declined 64 per cent and Chinese e-commerce giant JD.com ’s value has dropped 18 per cent since the beginning of this year. Didi shareholders face long odds to avoid losses ahead of vote to delist from New York Hillhouse, founded by Yale graduate Zhang Lei in 2005, has become an investment juggernaut since its early investments in some of China’s biggest tech firms. It has since become one of the biggest financiers in the industry. However, a series of regulatory crackdowns on China’s tech sector that kicked off at the end of 2020 brought about a sea change for VC investors. While Hillhouse has no legal obligation to reveal its portfolio performance, it was forced to deny a rumour in March that it had lost more than US$30 billion during the US-traded Chinese stock sell-off this year. Last August, Hillhouse denied a rumour that Zhang was barred from leaving China. The firm reported the matter to Beijing police, which concluded that the rumour was “fabricated”. In addition to the regulatory crackdowns, the Covid-19 pandemic and geopolitical frictions – especially the US-China tech war – have pushed the tech industry into a lower-growth era. VC investors and start-ups have subsequently faced mounting difficulties in raising money. In the first quarter, 12 new VC funds raised a total of US$3.32 billion, down 87 per cent from the year prior, according to financial data tracker Preqin. In the first quarter of 2021, 95 new funds raised US$25.52 billion. Chinese VC investment in start-ups also slid 35 per cent to US$25.5 billion, according to Preqin data, from US$39.5 billion the year before. Internet firms, which are subject to significant regulatory risks in China, have been the hardest hit. Fundraising volume for the internet industry plunged 76.7 per cent year on year in the first quarter, according to an April report from the state-run think tank China Academy of Information and Communications Technology.