China’s startups on the ropes after virus freezes funding

On Feb 13 Alibaba Group Holding Ltd warned of a significant hit to revenue growth from an epidemic that’s wreaking havoc across broad swathes of the Chinese economy. — Reuters

China’s highest-flying technology startups are struggling to stay afloat after the coronavirus outbreak threatened to paralyse critical venture capital funding.

Investment in an industry that runs on face-to-face contact and gut instinct has fallen off a cliff since the epidemic erupted in January. Venture capital funds slashed startup investment by 60% in January from a year ago, London-based consultancy Preqin estimates. That’s because angel investors and venture capitalists accustomed to road-testing new technology or grilling entrepreneurs in person now shun interaction and work from home.