VC Funding in China Drops 26.8% from Jan-Oct, While India Sees Surge

As India sees a surge in venture capital funding, China saw a steep 26.8 per cent decline in VC funding by value in the January-October period this year, according to a new report. A total of 2,116 venture capital (VC) funding deals worth $28.2 billion were announced in China during January-October.

According to GlobalData, a leading data and analytics company, "This marks a year-on-year (YoY) decline of 22.5 per cent in VC deal volume, while the total disclosed funding value declined by 26.8 per cent."

An analysis found that between January and October 2023, China saw a total of 2,731 VC deals with disclosed funding value of USD 38.5 billion.

The number of VC deals announced in China with a valuation of more than or equal to $100 million dropped from 70 recorded for the period from January to October 2023 to 50 recorded during January-October 2024.

"Crackdown on companies coupled with the ongoing conflicts, uncertain market conditions and economic challenges have weighed heavily on investor sentiment," said lead analyst Aurojyoti Bose of GlobalData.

This can also be gauged from the fact that China saw fewer big-ticket deals in January-October 2024 as compared to January-October 2023, according to Bose.

China accounted for a 15.4 per cent share of the total number of VC deals announced globally from January to October 2024 while its share in terms of the corresponding funding value stood at 12.9 per cent.

Despite this downbeat trend, China continued to remain a major player in the global VC landscape, right behind the US, both in terms of volume as well as value, according to Bose.

VC investors in India are interested in more traditional areas of investment, such as fintech, electric vehicles, and consumer technologies. The real drivers behind this optimism are strong demographics, a robust economy and a vibrant capital market.

In October, India saw private equity/venture capital investments worth $4.7 billion across 91 deals, a 40 per cent increase from September. Credit investments were the leading deal type in October, followed by growth investments, according to the IVCA-EY monthly PE/VC roundup.