Tech VC funding in China gets squeezed amid coronavirus epidemic
- The number of deals had shrunk to 144 midway through the first quarter, down from 340 a year earlier
Venture capital funding in China’s technology industry plunged midway through the first quarter of this year, as concerns over the novel coronavirus epidemic hinder start-ups and investors from meeting.
The amount of investments in Chinese tech start-ups fell 67.1 per cent to US$1.4 billion from January 1 to February 19, down from US$4.3 billion in the same period a year ago, according to data released on Thursday by PitchBook, which tracks global venture capital and private equity transactions. It also found the number of deals had shrunk to 144 from 340 a year earlier.
“In an industry that relies on in-person contact, Chinese start-ups are facing challenges travelling to meet with VCs to raise capital,” said Alex Frederick, senior venture capital analyst at PitchBook.
The situation has added further apprehension in China’s venture capital market, which has been hit by a cooling technology sector, policy headwinds and political uncertainty caused by the prolonged trade war between Beijing and Washington.
In the country’s southern coastal tech hub of Shenzhen, many VC firms have yet to resume full operations.