The number of Chinese early-stage venture deals fell by 45% in 2020 to 3,313. The pandemic-induced collapse continued a five-year-long decline in the number of rounds, though the number amount of total financing grew 12% YoY to $126B.
- Zhao Chen, the managing partner at start-up accelerator Plug and Play China, claims that potential founders are increasingly sticking at secure jobs. He attests that, while the venture opportunities have become more scarce, their quality has gone up.
- Large tech companies have added pressure to VC firms by beginning their own investment drives. Tencent, for example, did 113 deals in 2020.
- One of the few bright spots is in semiconductors, a sector that has been supported by the government’s “Great Semiconductor Leap Forward” plan. 13,000 companies entered the space, and funding grew by 500% last year (see graph).