China’s VC playbook is undergoing a sea change as U.S. IPO exits get tougher
Publishing timestamp: 2024-02-07 23:24:05
Summary
The Chinese venture capital world is facing significant changes due to geopolitical tensions, stricter regulations, and slower growth. Venture capitalists in China are under pressure to adapt their strategies as limited partners in the US pause investing in China and Chinese companies face challenges listing in the US. As a result, venture capitalists are looking for alternative sources of funding, such as the Middle East or funds tied to local government coffers. The shift towards domestic channels has also led to a decrease in the share of US dollars in total VC funds raised in China. The article highlights that the view on China's growth and VC returns has changed, and there is a trend towards investing in parallel entity overseas assets. Chinese authorities are emphasizing support for industrial development rather than consumer sectors, leading to a shift away from internet apps towards hard tech. This shift requires more capital, and the median deal size for VC transactions has increased significantly. The article raises concerns about the growing role of state-linked funds and policies in tech investment, which could impact innovation in the long term.
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Keywords: market insider, business news, alibaba group holding ltd, stock markets, markets,
Source: https://www.cnbc.com/2024/02/08/chinas-vc-playbook-is-changing-as-us-ipo-exits-get-tougher-.html