Slowing growth and geopolitical tensions are stifling the Chinese startup world that once spawned unicorns such as ByteDance and Didi, according to PitchBook.
Second-quarter deals marked the fourth-consecutive quarter of declines in deal value, according to PitchBook.The niche but once-burgeoning world of early-stage investors in China had seen firms raise billions of dollars from overseas institutions to invest in domestic startups, which would then hold an initial public offering in the U.S.
A record low of 10% of deals included an investor based outside of Greater China, down from about 16% in 2018, PitchBook said. On the fundraising front, the report said only three funds denominated in U.S. dollars closed in the first half of the year. "Anecdotally, we've heard that some US investors have pulled back from allocating to China mainly due to geopolitical concerns and several other factors, including a Chinese economic slowdown and crackdowns on the tech sector," the report said.
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