China’s startups and tech giants pulled in a record US$58.8 billion from investors in 2017, according to the Tech in Asia database. That’s up a few billion from 2016’s tally.
There was no sign of the giant bubble that some dreaded in 2016 after an explosion of local tech funds poured new – and very inexperienced – cash sources into the market.
“I think there are always ups, downs, and bubbles for specific verticals and sectors of funding. That was the case for bike-sharing and autonomous cars in 2017,” said Edith Yeung, partner and China boss at US-based 500 Startups. “Investors are hopeful they would see a Didi for bike-sharing,” she added, referencing China’s dominant ride-hailing app.
2017’s bumper haul came despite fewer funding rounds, resulting in a record-high average round of US$33.6 million a pop.
The year’s largest single investment, worth US$5.5 billion, went to Didi Chuxing. The startup raised a total of US$9.5 billion in 2017 as it ploughs cash into AI, a self-driving car research lab, and its hotly anticipated plans to expand beyond mainland China. Its expansion manifested itself yesterday when Didi acquired a Brazilian ride-hail app to get a grip on the fast-growing Latin America market that Uber covets so much.
See: China’s 10 biggest investments in 2017
Top gear
Didi and the bike-share startups – especially Mobike and Ofo – contributed to the logistics and transportation sector attracting the most funding, just as it did in 2016. Here’s the top five this year:
- 1st: Logistics and transportation, US$16.8 billion
- 2nd: Ecommerce, US$12.7 billion
- 3rd: Fintech, US$4.8 billion
- 4th: Hardware, US$2.6 billion
- 5th: General internet services, US$2.5 billion
Finance startups – aka “fintech” – raised half of what they did last year as China’s quick start in this sector in the past decade has resulted in several niches – online lending, insurance, etc – being dominated by big-name players. On top of that, a handful of Chinese fintech firms went public in 2017, led by insurer Zhong An. Money raised from an IPO is not shown in our data.
More moolah for mature startups
This year’s figures show a surprise resurgence in investor interest in more mature startups, particularly for series D investments.
As previous years have shown, funding for more established startups can fluctuate wildly.
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