ec china – Venture Capital

VCs unfazed by Chinese regulatory shakeups (so far)

August 11, 2021 by Anna Heim

This post is by Anna Heim from Fundings & Exits – TechCrunch

China’s technology scene has been in the news for all the wrong reasons in recent months. In the wake of the scuttling of Ant Group’s IPO, the Chinese government has gone on a regulatory offensive against a host of technology companies. Edtech got hit. On-demand companies took incoming fire. Ride-hailing? Check. Gaming? You bet.
The result of the government fusillade against some of the best-known companies in China was falling share prices. The damage topped $1 trillion among just public Chinese companies listed abroad.
The Exchange explores startups, markets and money.
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What about startups in sectors that were reformed overnight? If their public comps are any indication, even more wealth was deleted in the recent wave of crackdowns.
The Exchange was curious about the impact of the Chinese government’s actions on the venture capital market. The Chinese startup economy has produced a number of world-leading companies. Tencent and Alibaba, yes, and even Baidu have become well-known for a reason. Could regulatory changes shake up the venture model that helped grow the country’s largest tech concerns?
After we checked in on the same question this Monday, SoftBank provided a partial answer, noting yesterday that it is pausing investments in China. The Japanese teleco, conglomerate and investing powerhouse has been deploying capital at a rapid pace in recent weeks. That will slow, at least in China. Here’s the WSJ:
The regulatory (Read more...)

China’s regulatory crackdown is good news for startups aligned with CCP goals

July 28, 2021 by Alex Wilhelm
This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

Watching the Chinese technology sector over the last week has been a fascinating exercise. The Chinese government took on entire industries like edtech while also coming down on individual companies (Tencent, Meituan) in a broad effort to change the country’s technology landscape.
The sum of the financial damage is easy to understand. The NASDAQ Golden Dragon China Index, for example, which tracks U.S.-listed companies that do their business in China, fell from a 52-week high set earlier this year of 20,893.02 to 10,672.37 yesterday. You can also track the decline in value of various Chinese technology companies both on-shore and on foreign exchanges if you want to get an even fuller picture of the financial carnage.
It’s common among commentators and analysts to draw a direct line between the blocked Ant Group IPO last year, the ensuing fall from grace of Chinese entrepreneur Jack Ma, and the latest news out of the Chinese Communist Party’s (CCP) regulatory bodies. That’s reasonable. Things are changing in China, and the regulatory landscape of tech work in the country won’t be the same from here on out.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

We’ve explored the moment a little, noting last week that edtech investment could slow in the country provided that the government went through with its plan to force tutoring companies to go nonprofit. The government then did so, and more, also blocking (Read more...)

As China shakes up regulations, tech companies suffer

July 26, 2021 by Alex Wilhelm
This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

The Exchange spent a little time on Friday ruminating on the impact of then-rumored regulation in China targeting its edtech sector. News that the Chinese government intended to crack down further on the education technology market hit shares of public, China-based edtech companies. It was a mess.
Then over the weekend, the rumors became reality, and the impact is still being felt today in the global markets.
But there’s more. China is also bringing new regulatory pressure on food-delivery companies and Tencent Music. More precisely, we’ve seen successive market-dynamic-changing moves from the Chinese government in the last few days, coming as 2021 had already proved to be a turbulent environment for China-based technology companies.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
Today we have to do a little bit of work to understand precisely what is going on with the various regulatory changes. Why? Because the Chinese venture capital market is a key player in the global venture scene. And Chinese startups have gone public on both Chinese, Hong Kong and U.S. exchanges; there’s a lot of capital tied up in companies impacted today — and possibly tomorrow.
For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far. And upstart tech companies in sectors less likely to be targeted by central authorities may become more attractive to investors than they were before (Read more...)

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