International funding for Chinese start-ups dried up last year, pushing many fledgling technology companies to raise capital and list at home instead of on Wall Street, reports the Financial Times. Dollar investments in the country’s new companies fell by nearly three-quarters last year, declining to 19% of the total capital put into start-ups from 39% in 2021, according to new data from research group ITJuzi.
Chinese investors and founders say geopolitical tensions with the US, as well as Beijing’s tech crackdown and harsh zero-COVID policy spooked foreign investors. At the same time, growing support from the Chinese government and Washington’s sanctions also made raising renminbi more appealing.
The decision to raise dollars or renminbi generally puts Chinese entrepreneurs on two very different paths. One leads to successful companies going public in New York or in Hong Kong, while the other usually results in a listing in Shanghai, Shenzhen or Beijing.