Despite China tightening its grip on big technology firms, startups in the country emerged as a safe haven for global venture capital (VC) investors. A total of 2,674 VC funding deals were announced in China during January–August 2021 while the disclosed funding value of these deals stood at US$64.7bn, the highest in the region, according to GlobalData, a leading data and analytics company.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Apart from being the biggest Asia-Pacific (APAC) market, China is also a key market globally and stands just next to the US, which tops in terms of VC investments.”
An analysis of GlobalData’s Financial Deals Database reveals that China accounted for about 50% and 60% of the total VC funding deal volume and value, respectively, in the APAC region during the first eight months of 2021 while the country’s share in global VC funding deal volume and value stood at around 14% and 15%, respectively.
Mr Bose adds: “Not only that, while the key global markets such as the US and the UK experienced decline in deal activity in August 2021 compared to the previous month, China managed to witness growth in VC deal volume as well as value.”
August witnessed a rebound in VC funding value in China after a decline in July while VC funding volume has been seeing consistent growth for the three consecutive months.
Some of the notable VC funding deals announced during the period include US$1.5bn capital raised by Horizon Robotics, US$700m funding raised by Abogen Biosciences, US$750m capital raised by Beijing Shihui Technology, and US$700m funding raised by Dingdong Maicai.
Mr Bose concludes: “The fact that the China startup ecosystem continues to dominate the APAC VC landscape despite the COVID-19 pandemic and regulatory shakeup is a testament to its potential. Expanding consumer market, rapid increase in entrepreneurial spaces, and affordable labor costs make the East Asian country a favorable destination for startups in the long-run.”
