Venture capital investment in China

2024: China overtakes the United States in the number of new startups worth from $1 billion

China for the first time overtook the United States in the number of new startups, the cost of which exceeds $1 billion. This became known on August 14, 2024. Read more here.

2023:90% of global venture capital investment in chips comes from China

In early July 2024, the analytical company Preqin published a report according to which 90% of venture capital investments in the global semiconductor industry are in China. While total funding continues to fall, investors continue to invest in tech sectors of China's economy, such as artificial intelligence research and the semiconductor industry.

In 2023, China received 90% of global venture capital investment in the chip manufacturing sector totaling $22.2 billion, more than double the amount invested in 2022. Half of the venture capital investment in the semiconductor sector came from three "mega-deals" struck between the municipal authorities and Sino IC Capital, the asset manager of China's Integrated Circuits Industry Investment Fund.

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Investment in the sector has since fallen, with only $1.6 billion invested in 128 deals in the first half of 2024. However, China still accounted for four of the world's top ten investment deals in the semiconductor industry.

Government-backed investors are playing an increasingly significant role in financing the private market in China. They took part in approximately 60 of the top 100 deals from 2021 to June 2024, double the number of related deals between 2017 and 2020.

In addition, in 2024, large investments in the development of AI and environmentally friendly technologies were also recorded. Among the top 10 venture capital deals registered from January to June 2024, two took place in China. Electric car maker IM Motors raised $1.1 billion, and generator AI startup Moonshot AI raised $1 billion. Both companies received support from Alibaba Group Holding.^[1]

2021: Venture capital investment in China rose 50%, to $130.6 billion

At the end of 2021, venture capital investments in China reached $130.6 billion, a record for the country. Compared to 2020, the figure increased by 50%, from $86.7 billion.

Entrepreneurs and venture capital firms have shifted their focus from internet businesses to technologies such as semiconductors, robotics and enterprise software, according to research firm Preqin. For example, the amount of money invested in biotechnology in 2021 reached $14.1 billion, which is ten times more than in 2016.

Venture investments in China grew by 50%, to $130.6 billion

China still lags far behind Silicon Valley in terms of venture capital investment in general. In 2021, the United States reached its new record of $296.6 billion, more than twice the total for the Asian country. But in some fundamental technologies, China has already surpassed the United States. For example, Chinese chipmakers, integrated circuit developers and other startups that specialize in semiconductors received $8.8 billion in funding in 2021, more than six times the $1.3 billion invested in comparable companies in the United States.

In its latest five-year economic plan, unveiled in March 2021, Beijing set targets to increase national spending by RESEARCH AND DEVELOPMENT more than 7% a year and highlighted seven technological areas in which the country hopes to achieve significant breakthroughs. They include space exploration, brain science and quantum information - all sectors in which American companies lead the way. The Chinese government is also betting big on new hydrogen technologies like cars and biotech, while helping its semiconductor industry close the gap with companies like and. Intel TSMC^[2]

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