Source: GlobalData
China VC funding value down by more than 50% YoY in Q1 2025, finds GlobalData
Posted in Business Fundamentals
The venture capital (VC) funding landscape in China has experienced a notable contraction in the first quarter (Q1) of 2025 wherein deal volume and value have both seen significant declines compared to the same period in previous year. China recorded a year-on-year (YoY) decrease of around 18% in VC deal volume in Q1 2025. The value of VC funding has YoY plummeted even more drastically at more than 50%, according to GlobalData, a leading data and analytics company.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The contraction highlights the challenges startups are facing in securing funding for growth and innovation. The downturn could be attributed to several factors, including increased regulatory scrutiny, slowdown in economy, and geopolitical tensions that have made investors more cautious. Although the recent downturn raises concerns related to investor sentiments, the country still holds a significant share of global VC activity.”
An analysis of GlobalData’s Deals Database revealed that despite the decline, China’s share of global deal volume remains substantial, accounting for more than 15% of the total number of VC deals announced globally during the quarter.
But on the other hand, this sharp drop in funding value has resulted in China’s share of global deal value fall from 21.8% in Q1 2024 to 9.3% in Q1 2025. In contrast, the US has seen a remarkable increase in VC funding value, further widening the gap between these two economic powerhouses.
Bose concludes: “While the country remains a vital hub for venture capital, the current environment reflects a recalibration of investor sentiment. The decline in both deal volume and value indicates that investors are becoming more selective, focusing on sectors or start-ups with clear growth potential and sustainable business models.”
Note: Historic data may change in case some deals get added to previous months because of a delay in disclosure of information in the public domain.