TLDR:
- Venture-capital investment in China fell to pandemic-era lows in the first quarter of 2024, dropping 30% quarter on quarter to US$11.5 billion.
- China still leads Asia’s VC landscape, with eight of the continent’s 10 biggest deals in the first three months of the year.
Venture capital (VC) investment in China took a hit in the first quarter of 2024, dropping to levels not seen since the early days of the Covid-19 pandemic. Despite this, the AI, electric vehicle (EV), and clean energy sectors stood out as exceptions to the overall decline. China continued to dominate the VC landscape in Asia, capturing eight of the top 10 deals on the continent. However, the total VC investment in China fell by 30% to US$11.5 billion, the lowest since the first quarter of 2020.
Global market challenges such as the lack of exits, high interest rates, and geopolitical uncertainties kept VC investors cautious. The AI sector remained a bright spot in China, with the country producing an average of one new unicorn per week in 2023, largely driven by investments in AI. Deals in the first quarter of 2024 also saw significant investments in clean energy, with companies like Huakong Power and Guangxi CNGR New Energy securing large funding rounds.
Overall, Asia saw a decline in both investment value and deal activity in the first quarter, while investment in the Americas far outpaced both Asia and Europe. Late-stage funding rounds took a hit, with the median deal size shrinking, but potential policy moves to stimulate the economy could help improve investor confidence in China later in the year.
