China takes 2 of the 10 largest VC deals globally
BEIJING, June 26, 2024 (GLOBE NEWSWIRE) - Preqin, the global leader in alternative assets data, tools, and insights, today published its Territory Guide: Greater China Venture Capital Deals report. The report shows that while foreign venture capital (VC) firms have been pulling back from investing in Chinese companies in recent years owing to higher interest rates and geopolitical tensions, Chinese domestic investors have been stepping in to fill this gap.
The report goes on to highlight that the largest rounds of funding came from China’s state-backed players, including banks, government agencies, and local authorities. They participated in around 60 of the 100 largest deals from 2021 to June 2024, twice as many as from 2017 to 2020. Chinese tech giants such as Meituan and Alibaba Group are also increasingly active.
Greater China investors accelerate domestic investments in AI, semiconductors, and clean technology
Amid higher interest rates, lack of exit pathways, and heightening geopolitical tensions between the United States and China, venture funding has taken a hit globally, but particularly in the Greater China region.* Despite these challenges, China remains home to 2 of the 10 largest VC deals globally and 8 of the 10 largest VC deals in the Asia-Pacific (APAC) region, according to Preqin data as of June 2024. These mega deals were predominantly in the artificial intelligence (AI), semiconductor, and clean technology verticals – all industries that the Chinese government intends to grow and support. Of these mega deals, AI was a driving force. AI VC deals in the Greater China region by May 2024 reach almost $6bn – around half of 2023’s full-year total of $12bn.
Trade tariffs, with US restrictions on US VC firms and companies, are causing foreign investors to pull back from the region, while the Chinese government supports state-backed players to step in the gap. Other domestic investors, such as tech corporations, are also heavily investing.
Valerie Kor, lead author of the report at Preqin, says, “It’s a challenging environment for venture capital in the Greater China region, as investors struggle with exiting their investments in private companies. However, as foreign investors pull back, Chinese domestic investors such as tech corporations and state-backed funds have stepped in to fill the gap, investing heavily in key verticals covering AI, semiconductors and clean technology that are aligned with China’s broader economic policies.”
Additional key findings include:
- Clean technology in China sees strength: Clean technology VC deals in China overtook the US in aggregate deal value and volume in 2022 and 2023, respectively. In 2022, these deals aggregated to $12bn, surpassing that of the US at $11.6bn, and further increased 22% year-on-year to almost $15bn in 2023, double the $7bn from the US. A third are from investments in electric vehicle companies. In terms of volume, over 300 clean technology VC deals were concluded in China in 2023, more than the 200 that were in the US.
- Greater China VC deal volume has significantly fallen compared to the global figure: Private companies in Greater China raised over $12bn in Q1 2024, down 42% on the previous quarter, representing a steeper drop than the global decline of 12% in the same period. The number of deals has also decreased by 20% quarter-on-quarter, double the global fall of 10%. These data trends demonstrate that amid heightening geopolitical tensions and a lack of exit pathways, venture funding has taken a hit in Greater China.
- Foreign VC firms have pulled back from investing in Chinese companies: Total venture funding from foreign investors into Greater China deals contracted sharply from $67bn in 2021 to $19bn in 2023. American firms have also been absent from the largest deals in recent years, following increased scrutiny from the US government. In contrast, the flow of venture funding from Greater China investors was relatively steady, dipping 17% year-on-year from 2021 to 2022, before increasing 3% in 2023 to reach over $60bn.
Note to editors:
Currency is USD
* In this report, the Greater China region includes mainland China, Hong Kong – SAR, Macao – SAR, and Taiwan.
If you would like more information or would like to speak with the report author, please contact Mimi Celeste Taylor at mimiceleste.taylor@preqin.com
About Preqin
Preqin, the Home of Alternatives™, empowers financial professionals who invest in or allocate to alternatives with essential data and insight to make confident decisions. It supports them throughout the entire investment lifecycle with critical information and leading analytics solutions. The company has pioneered rigorous methods of collecting private data for over 20 years, enabling more than 200,000 professionals globally to streamline how they raise capital, source deals and investments, understand performance, and stay informed. For more information visit www.preqin.com.
-
河南之旅:探寻千年文化,品味中原风情河南,这片古老而富饶的土地,承载着中华五千年的文明历史。走进河南,就像走进了一部厚重的历史长卷,每一步都充满了故事与传奇。今天,就让我们一起踏上这场河南之旅,探寻2024-06-26
-
Greater China VC mega deals driven by artificial intelligence (AI) — Preqin reportsChina takes 2 of the 10 largest VC deals globally BEIJING, June 26, 2024 (GLOBE NEWSWIRE) - Preqin, the global leader in alternative assets data, to2024-06-26
-
《党在我心中》非凡成就杰出军旅艺术家张金铭《党在我心中》特邀非凡成就杰出军旅艺术家张金铭老师,他以中国艺坛新颖独特的视角展现了美仑美奂的传世经典画作,呈现出了新世纪绚烂辉煌、璀璨夺目的艺术大观2024-06-26
-
《红墙国粹》中国顶尖级艺术家·曹弘何为“红墙”艺术家? “红墙”艺术家:作品被人民大会堂、中南海、故宫博物院等国家机关及权威收藏部门收藏的艺术家被誉为“红墙”艺术家,也被称为“御用艺术家”!2024-06-26
-
贵州装饰网:打造您的梦想家居,让美触手可及!在这个日新月异的时代,家居装饰早已不再是简单的墙面粉刷和家具摆放,它更是一种生活态度的体现,一种对美好生活的追求。而贵州装饰网,正是您实现这一梦想的理想平台。2024-06-26