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China experienced a decline in venture capital (VC) funding activity during January-July 2023. The country saw a 16.5% decrease in deal volume and a 28.6% reduction in disclosed funding value compared to the same period in 2022. However, this contraction appears relatively measured when juxtaposed with other major economies, reveals GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that 1,871 VC funding deals were announced in China during January-July 2023 compared to 2,241 during January-July 2022. The corresponding disclosed funding value declined from $32.5 billion to $23.2 billion
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Despite a measured decline in funding activity, China’s relative stability, in contrast to other major economies, underscores its enduring appeal. This signifies a potential for recovery and growth, positioning China as a pivotal player in the global venture capital arena.”
For instance, in the US, which is the top market by VC funding activity, deal value and volume declined by 50.6% and 37.4%, respectively, year-on-year (YoY) during January-July 2023.
Similarly, other key markets such as the UK and India also registered 28.4% and 42.9% decline in VC funding deal volume while the corresponding deal value fell by 54.3% and 72.5%, respectively, during January-July 2022.
China, apart from the top APAC market, is also a key global market for VC funding activity and strands just next to the US in terms of deal volume as well as value. China accounted for 14.9% of the total number of VC deals announced globally during January-July 2023 while its share of the corresponding deal value stood at 16.4%.
Some of the notable VC funding deals announced in China during January-July 2023 include $750 million secured by Zeekr, $623 million raised by Xiamen Hithium Storage Technology, $600 million secured by Farizon Auto, and $375 million fundraising by Libode.
Bose concludes: “As the venture capital landscape continues to evolve, China's position remains pivotal, poised to wield its influence in shaping the worldwide trajectory of innovation and investment.”
Note: Historic data may change in case some deals get added to previous months because of a delay in disclosure of information in the public domain.
