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Venture capital market
Tech

China’s venture capital market plummets amid trade war, tech start-up valuation concerns

  • The value of investments tumbled 77 per cent year on year to US$9.4 billion in the second quarter
  • The number of deals in the country roughly halved to 692

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A Chinese national flag flies against the backdrop of skyscrapers at the Lujiazui financial district across the Huangpu River in Shanghai’s Pudong district. Venture capital deals in China plunged in the second quarter, as investors pulled back amid unpredictable trade talks and growing concerns about tech start-up valuations. Photo: Bloomberg
Bloomberg
China went through a five-year surge in venture capital investment that fostered a new generation of start-ups, from ride-hailing giant Didi Chuxing to TikTok-parent ByteDance. Now the boom may be over.

Venture capital deals in China plummeted in the second quarter, as investors pulled back amid unpredictable trade talks and growing concerns about start-up valuations. The value of investments in the country tumbled 77 per cent to US$9.4 billion in the second quarter from a year earlier, while the number of deals roughly halved to 692, according to market research firm Preqin.

The second quarter of last year marked the peak for China venture deals with a total of US$41.3 billion invested.

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That included a US$14 billion round for digital payments giant Ant Financial Services, US$3 billion for e-commerce upstart Pinduoduo and US$1.9 billion for truck-sharing services firm Manbang Group, also known as Full Truck Alliance Group.

By comparison, the largest venture deal in the second quarter of this year was a US$1 billion investment in JD Health, the health care affiliate of e-commerce services provider JD.com.

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