VCs insensitive to Chinese regulatory upheavals (so far) – TechCrunch

Chinese technological scene The last few months have been in the news for all the wrong reasons. Triggered by Scuttling of the IPO of the Ant group, The Chinese government is launching regulatory attacks on many technology companies. Edtech has been hit..Business on demand I took the incoming fire.. Ride hail? Check.. Game? You bet..

Stock prices have plummeted in the wake of government rounds on some of China’s most famous companies. Over $ 1,000 billion Among Chinese state-owned enterprises listed abroad.


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What about startups in the sector that were reformed overnight? More wealth has been wiped out in the recent crackdown if their public awards are any sign.

The exchange looked at the impact of Chinese government actions on the venture capital market. China’s start-up economy has spawned many of the world’s leading companies. Tencent and Alibaba, yes, and even Baidu have become well known for reasons. Can regulatory changes undermine the business model that has helped spread the country’s biggest technical concerns?

After checking in the same Question this monday, Softbank said yesterday that it had suspended its investments in China and provided a partial response. The teleco companies, conglomerates and investment powers of Japan have invested rapidly in recent weeks. At least in China, it will be slow. This is the WSJ:

China’s regulatory initiatives are so unpredictable and widespread that SoftBank and its funds plan to postpone investing in China further until the risks become apparent. [SoftBank CEO Masayoshi Son] Told at a results press conference in Tokyo.

Did SoftBank miss China’s deals for a while before making decisions that would undermine its investment strategy? Or is it slow? Data protected against PitchBook When Traxcn This portrays the surprising state of venture capital activity at least in the third quarter of 2021.

But first, remembering how well the Chinese venture capital market was performing in 2020 made that path easier in 2021.

Before shaking

Despite the turmoil, China was pretty good in the second quarter of 2021.

Indeed, the influx of money into Chinese start-ups is down 18% compared to the fourth quarter of 2020. CB Insight, However, the quarter hit a record high of $ 27.7 billion. Despite the $ 22.8 billion raised, Q2 2021 is better than other quarters since Q2 2016 except Q2 2018, Q4 2020, and Q1 2021. Was also good. Cool off at the end of 2018 Before resuming at the end of 2020.

However, this is only one way to check the numbers. Comparing the results of recent Chinese companies with other regions, the performance was poor. During the second quarter of 2021 US funding hits new high of $ 70.4 billionIn a place like Latin America, Canada When India He also sets a new record.

It also means that China has lost its position in terms of share of global startup transactions, and so has the creation of unicorns. according to CB Insights Data Summary by Tech Buzz ChinaThe United States counted the birth of 132 unicorns between January 1 and June 16, 2021, but only three in China.

A slight decrease in total quarterly venture capital and a significant decrease in unicorn training doesn’t mean startups will go into winter. Now let’s see what happened recently.

What about Q3 then?

The theory that China’s venture capital activity will immediately and clearly slow down is not supported by the data we have obtained.

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