China’s venture capital (VC) funding landscape has encountered notable challenges in terms of both deal volume and deal value during the first five months of 2025. While the VC deal volume experienced a year-on-year (YoY) decrease of around 11% during January-May 2025, the downturn is even more pronounced in terms of deal value at nearly 48%, reveals GlobalData, a leading data and analytics company.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The subdued activity could be a result of dent in investor sentiment owing to challenging regulatory environment and uncertain market conditions. While the current landscape reflects a cautious approach from VC firms, it also raises concerns about the future of investment in the country. Moreover, the trend could also be indicative of a shift in investor sentiment towards more stable markets.”

In comparison, even though the US experienced a decline in VC deal volume, it has seen around a double-fold jump in deal value during January-May 2025. India has also shown resilience, with a YoY increase in VC deal volume of around 14% and a notable rise in deal value by approximately 29% during the same period.

Nevertheless, China continues to remain among the top five markets for VC funding activity globally both in terms of deal volume and value.

An analysis of GlobalData’s Deals Database revealed that China accounted for more than 16% share of the total number of VC deals announced globally during January-May 2025 while its share of the global deal value was around 6%.

Bose concludes: “Despite facing substantial headwinds, China remains a prominent market in the global VC landscape. The current lull in VC funding activity is less about permanent retreat and more about recalibration. As investors increasingly prioritize sustainable returns and resilient business models, it is essential for stakeholders in China to adapt to these changing dynamics.”

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.