VC funding drops 22.5 pc in China in Jan-Nov as India sees surge

As venture capital (VC) funding surged in India this year, China saw a 22.5 per cent decline in VC funding by both volume and value in the January-November period, a report showed on Thursday.

A total of 2,313 VC funding deals were announced in China during January-November 2024, while the total disclosed funding value of these deals stood at $32.3 billion, according to GlobalData, a leading data and analytics company.

This represents a year-on-year (YoY) decline of 23.1 per cent in VC deal volume, whereas the total disclosed funding value fell by 22.5 per cent, according to GlobalData, a leading data and analytics company.

In the same period last year, a total of 3,006 VC deals were announced in China while the total disclosed funding value of these deals was $41.7 billion.

According to Aurojyoti Bose, lead analyst at GlobalData, VC funding activity in China has continued to remain subdued in 2024 as investor sentiments seem to have taken a hit on the back of a crackdown on companies, macroeconomic challenges, and uncertain market conditions.

“However, despite the decline, China, apart from being the top APAC market for VC funding activity, also continues to be a key global market, standing just next to the US both in terms of deal volume and value,” Bopse mentioned.

China accounted for a 15.2 per cent share of the total number of VC deals announced globally during January-November 2024 while its share in terms of the corresponding funding value stood at 13.6 per cent.

Among the notable VC funding deals included $1.5 billion worth of funding raised by Changxin Technology, $1.4 billion fundraising by AVATR, $1.1 billion worth funding secured by IM Motors, and $1 billion funding received by Moonshot AI, among others.

Meanwhile, VC investment in India surged considerably to $4 billion in the April-June period (Q2 2024), from $2.9 billion in the previous quarter. On the other hand, China saw a massive decline in VC investment from $13.5 billion to $6.9 billion in the same period.

VC investment is expected to continue to pick up in India, driven in part by the country's stable government and positive economic environment, according to a recent KPMG report.