Venture capitalists bet big on emerging Chinese tech companies, says GlobalData

Venture capitalists (VC) are pouring capital into China’s emerging tech companies. As a result, four of the top five VC funded companies in the emerging tech space in Asia-Pacific (APAC) in 2018 were from China and the trend is likely to continue, says GlobalData, a leading data and analytics company.

China-based Ant Financial attracted the highest VC funding among all emerging tech companies throughout the whole year. Interestingly, the US$14bn raised by the company in 2018 remains the single largest fundraising ever by a private company so far. Ant Financial, which is involved in the payment technologies space, is the parent company of Alipay – the largest mobile payments network in China.

Other Chinese companies to secure a place in the 2018 list included Pinduoduo, SenseTime and Shanghai Junzheng Network Technology Co Ltd (Hello TransTech) with a disclosed funding of US$3bn, US$2.2bn and U$1.6bn, respectively. Singapore-based ride-hailing platform Grab was the only non-Chinese company to make it to the list with a total disclosed funding of US$2.5bn.

Aurojyoti Bose, Financial Deals Analyst at GlobalData, comments: “The growing presence of Chinese companies in the emerging tech space could be attributed to an ecosystem that is conducive for start-ups, the government’s supportive policies and China’s ambitions to become a global tech leader.”

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While Pinduoduo is an e-commerce platform, Hello TransTech is a ride sharing platform. SenseTime is active in AI application areas such as image recognition, facial recognition, text recognition, autonomous driving, remote sensing, video analysis and medical image analysis.

Bose adds: “Other companies active in these AI application areas are also receiving lots of attention. With respect to technology, companies working in digital business areas such e-commerce, online delivery and ride sharing services have been able to generate significant investors’ interest.”

China-based Shanghai Lujiazui International Financial Asset Exchange Co Ltd (Lufax), which offers an online platform for financial assets trading, secured US$1.3bn in 2018. Similarly, Bundl Technologies Pvt Ltd (Swiggy), an online food delivery service provider based in India, raised US$1.3bn. China-based bike-sharing platform, Ofo, also raised US$866m in 2018. All three companies featured among the top 20 VC funded emerging tech companies in APAC in 2018.

Along with a growing e-commerce market, payment tech companies which offer digital wallets, mobile payments and cryptocurrency platforms are also getting investors’ attention. For example, cryptocurrency mining giant Bitmain Technologies Ltd was also a noticeable example from this segment and was able to attract US$734.8m VC funding in 2018.

Of the total VC deals in the emerging tech space in APAC, Chinese companies accounted for around 55% of the deal volume and approximately 78% of the deal value in 2018. India and Singapore held distant second and third positions with contribution of around 22% and around 6% to the total deal volume, and nearly 12% and nearly 6% to the total deal value, respectively.

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