Venture capital (VC) funding in Chinese startups dropped 46.4% to $57.4 billion in 2022 from $107 billion in 2021 due to regulatory crackdown on technology companies and a stringent zero-COVID policy, data and analytics firm GlobalData said.

Financing deal volume fell by 14.4 percent to 3,755 in 2022 from 4,388 in 2021.

The massive decline in venture capital funding value is indicative of the cautious nature of the investors, said Aurojyoti Bose, Lead Analyst at GlobalData.

“In fact, there was a notable fall in average funding size of VC deals announced in China during 2022,” he added.

China is the top Asia-Pacific market and among the top four markets globally in terms of VC funding deal volume and value. It accounted for 14.1% and 13.6% share of global VC funding value and volume, respectively, in 2022. 

However, China experienced the highest decline among the top four markets, including the US, the UK and India.

VC funding value in other key global markets, such as the US, the UK and India, declined by 40.8%, 24.3% and 38.2% year-on-year, respectively, GlobalData said.

(Editing by Seban Scaria