China’s startup ecosystem is dead
A total of 260 companies have been founded this year in China, a nation of more than 1.4 billion people, according to data published today in a Financial Times deep dive into the country’s startup woes.
That’s not a typo. From peak to trough, the number of companies being founded in China has dropped 99.5% from more than 51,000, according to the statistics, which came from data provider IT Juzi.
“The whole industry has just died before our eyes,” a company executive in Beijing told the FT. The reasons are myriad: China’s equity markets are stagnant, its economy is slowing, the property bubble has popped, and it was hurt deeply by Covid-19. US investors are also pulling money out of the country as geopolitical tensions have risen.
One venture capital insider said: “Five years ago, the venture capital and private equity guys were masters of the universe… Now they’re depressed.”
“The whole industry has just died before our eyes,” a company executive in Beijing told the FT. The reasons are myriad: China’s equity markets are stagnant, its economy is slowing, the property bubble has popped, and it was hurt deeply by Covid-19. US investors are also pulling money out of the country as geopolitical tensions have risen.
One venture capital insider said: “Five years ago, the venture capital and private equity guys were masters of the universe… Now they’re depressed.”
