China’s innovation ecosystem remains a compelling destination for VC funding, says analyst
The value of venture capital (VC) deals in China sank 37.5% to $15 billion in the first five months of 2023, compared to $24 billion a year earlier, GlobalData, a data and analytics company, said in a new report.
The number of VC deals also slipped 18.1% to 1,310 during the period compared to 1,599 in the same period last year.
“Geopolitical tensions and recession fears seem to have had a dent in deal-making sentiments in China,” said Aurojyoti Bose, Lead Analyst at GlobalData.
However, China remains the top Asia-Pacific (APAC) market and one of the top five markets globally for VC funding activity in terms of deals volume and value.
China accounted for a 14.4% share of the total number of VC deals announced globally from January to May 2023, while its share of the corresponding deal value stood at 14.3%.
The major deals included $750 million secured by Zeekr,a smart mobility tech startup and $375 million fundraising by Libode, a producer of lithium-ion batteries.
Despite the challenges, China’s innovation ecosystem remains a compelling destination for venture capital funding, Bose stated, indicating potential for future growth and opportunities.