The venture ecosystem of Greater China—defined as China, Taiwan, Macau and Hong Kong—has become increasingly insular as foreign investor participation in deals reached its lowest recorded figure in the first six months of this year.
A total of 264 deals worth $4.3 billion featured non-Chinese investors in H1, according to PitchBook’s H1 2023 Greater China Venture Report, representing 10% of overall deal count in the region. Some 92.4% of rounds include investors based in Greater China.
US-based investors in particular have been pulling back, present in 3.2% deals in H1 as opposed to 4.6% last year, as political tensions between China and the US mount.
The Biden administration’s executive order from August restricting investments into Chinese startups operating in areas including semiconductors, quantum computing and AI has limited US investments.
Earlier this year, Sequoia decided to split its China arm from its European and US operations, a decision spurred by the increased tensions.
Among the deals in Greater China to have featured foreign investors are Hong Kong-based biorefinery platform EcoCeres’ $400 million fundraise from Bain Capital. Chinese ecommerce platform JD Industrials’ $300 million Series D was led by Abu Dhabi-based investors Mubadala Investment Company and 42XFund.
Featured image by Wong Yu Liang/Getty Images
