China’s regulatory crackdown on tech companies, coupled with stringent zero-COVID policy has dented investor confidence in the country’s startups. Subsequently, the value of venture capital (VC) funding in Chinese startups experienced year-on-year drop of 46.4% in 2022, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that VC financing deal volume in China fell by 14.4% from 4,388 in 2021 to 3,755 in 2022. Meanwhile, the disclosed funding value registered a massive 46.4% drop from $107 billion in 2021 to $57.4 billion in 2022.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “China is the top Asia-Pacific market and is also among the top four markets globally in terms of VC fundings deal volume as well as value. It accounted for 14.1% and 13.6% share of global VC funding value and volume, respectively, in 2022. While all the top four markets (the US, China, the UK and India) registered decline in VC funding value, China experienced the highest decline.

“The massive decline in VC funding value is indicative of cautious nature of VC investors. In fact, there was a notable fall in average funding size of VC deals announced in China during 2022.”

The average size of VC funding deals in China too decreased from $24.4 million in 2021 to $15.3 million in 2022.

VC funding value in other key global markets such as the US, the UK and India fell by 40.8%, 24.3% and 38.2%, respectively, in 2022 compared to the previous year.

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.