China’s economic slowdown has mainly hit local VC’s, says William Bao Bean, managing director of the Chinaccelerator, at OZY.com. A government crackdown on risky investments and the fallout from the trade war is hitting the industry after the 2017-2018 boom.
Local venture capital firms that raise money and invest in renminbi have been hit hardest, says William Bao Bean, a partner at SOSV Investments in Shanghai.
“Almost all those VCs didn’t get a return … and a lot of funds have gone out of business,” Bean says, noting that while dollar investment from traditional VC funds has cooled, it hasn’t been hit to the same extent…
Hurun Report noted that even though the pace of creation of unicorns has slowed, China still leads the world, with 206 unicorns to the United States’ 203.
But the Chinese economy is now growing at its slowest pace in three decades, a worrisome trend that is twinned with a rocky stock market and concerns about the sky-high valuations for startups. “It’s another Chinese winter, since basically last September everyone on the local side, investing renminbi has been on vacation,” says Bean.
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