China’s VC boom may bust


  • Business Premium
  • Tuesday, 09 Jul 2019

TOKYO: China went through a five-year surge in venture capital (VC) investment that fostered a new generation of startups from ride-hailing giant Didi Chuxing to TikTok-parent Bytedance Ltd. Now the boom may be over.Venture deals in China plummeted in the second quarter as investors pulled back amid unpredictable trade talks and growing concerns about startup valuations. The value of investments in the country tumbled 77% to US$9.4bil in the second quarter from a year earlier, while the number of deals roughly halved to 692, according to the market research firm Preqin.

The second quarter of 2018 marked the peak for China venture deals with a total of US$41.3bil invested. That included a US$14bil round for digital payments giant Ant Financial, US$3bil for e-commerce upstart Pinduoduo Inc and US$1.9bil for truck-sharing service Manbang Group (known also as Full Truck Alliance Group). By comparison, the largest venture deal in the second quarter of 2019 was a US$1bil investment in JD Health, the health care affiliate of e-commerce provider JD.com Inc.

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