China’s startup scene is dead as investors pull out—’Today, we are like lepers’
The number of new companies that are started in China annually has collapsed as fundraising by Chinese venture capital firms has similarly imploded.
A recent Financial Times report described a dire Chinese startup landscape, with founders, investors, and VCs offering bleak comments on condition of anonymity.
“The whole industry has just died before our eyes,” a Beijing-based executive told the FT. “The entrepreneurial spirit is dead. It is very sad to see.”
According to data from IT Juzi cited in the report, the number of companies founded in China so far this year is just 260, on track to dip below 2023’s tally of 1,202 and a 99% decline from a peak of 51,302 in 2018.
In comments posted on X, IT Juzi’s CEO said the data don’t reflect all startups, adding that while China’s VCs and founders have faced challenges recently, the country still has “great creativity and entrepreneurial spirit.”
But VC fundraising has taken a similar dive. Yuan-denominated funds have raised the equivalent of $5.38 billion year to date, down from a peak of nearly $125 billion in 2017. Meanwhile, dollar-denominated funds have raised less than $1 billion, down from a high of $17.3 billion in 2022, according to Prequin.
