Mr Viral
Q1 2025 tech VC in China hit $6.9B, down 45% YoY
Foreign capital nearly vanishes; U.S. investors account for under 2%
China claims just 6% of global VC, down from 31% at 2016 peak
82% of funding flows to manufacturing, especially semiconductors
Shanghai and Beijing fall behind Bangalore, Tel Aviv in startup rankings
China’s once-vibrant startup investment scene is in contraction mode.
According to Dealroom’s latest report, Chinese startups raised just $6.9 billion in Q1 2025—down 45% from the same period last year. The volume of funding rounds held steady but remains roughly half of 2023 levels, signaling a clear decline in investor appetite.
The more profound shift? Who’s investing. Foreign capital has nearly vanished.
U.S. investors, who once contributed over 20% of startup funding in China during 2017–2018, now account for less than 2%.
Overall, China’s share of global venture capital has shrunk to just 6%—a far cry from its 31% peak in 2016.
Amid the retreat, there’s a new locus of intensity: semiconductors.
As China pushes for self-sufficiency in core tech sectors, VCs are doubling down on chips.
Of the $6.9B raised this quarter, a staggering 82% flowed into manufacturing, up from 60% in Q1 2024. The semiconductor sector alone absorbed $1.1B.
