TLDR:
- China accounts for 5 of the top 10 clean energy venture-capital deals globally in the first half of 2024.
- The Chinese clean energy firms raised $2.93 billion, two-thirds of the total from the world’s top 10 deals.
Chinese clean energy companies have dominated the top 10 venture capital deals globally in the first half of 2024, with five deals raising $2.93 billion, which is two-thirds of the total from the top 10 clean energy deals. The majority of these deals were focused on companies in the supply chain for battery-powered and hybrid vehicles, with most investments coming from domestic institutions. This trend of Chinese dominance in clean energy deals continues from previous years, with China surpassing the US in clean energy deal volumes in 2022 and 2023.
Aside from clean energy, Chinese unlisted companies have also drawn significant funds in the fields of artificial intelligence (AI) and semiconductors. AI, in particular, has been a driving force behind mega deals, reaching almost $6 billion by May this year. Despite a drop in overall deal volumes in China, the interest in AI and clean energy technologies remains strong.
The Chinese government has shown its support for growing and developing industries, such as clean energy and AI, attracting investments from both domestic and foreign investors. However, challenges such as higher interest rates, lack of exit pathways, and geopolitical tensions between the US and China have impacted venture funding globally, particularly in the Greater China region.
Despite these challenges, the outlook for raising private capital for clean energy in China seems optimistic, with domestic investors playing a more significant role. Deals in this sector must demonstrate strong technological advancements to attract investors. The alignment of clean energy technology with Beijing’s economic growth policies suggests that deal flow in this sector is likely to increase, mostly driven by domestic state-backed players with both capital and patience to invest.
