Venture capital

Nowhere to hide: Chinese startups struggle to attract both private & public investors

Following a year of mega IPO flops, Chinese VC investment plummeted in the second quarter as private investors baulked at spiralling valuations. Staying private for longer will no longer be so easy for entrepreneurs.

Unprofitable, fast-growing Chinese startups have, for the last five years, been able to tap private investors flush with cash, allowing them to put off filing for an initial public offering and the associated public scrutiny of their accounts that will no longer be the easy option.

China’s fund-raising machine has nurtured a herd of Chinese unicorns, privately owned companies valued at over a billion dollars, like Alibaba’s unit Ant Financial, ride-hailing giant Didi and ByteDance, the parent of video sharing app TikTok.

It now appears to be grinding to a halt.

Greater Chinese private investments plunged 77% in the second quarter to...

¬ Haymarket Media Limited. All rights reserved.

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