Fundraising by China-focused private equity investors has fallen to its lowest level in 13 years, as early-stage backers of the country’s start-up scene grapple with Beijing’s tech crackdown and zero-Covid policies, reports the Financial Times. Venture capital and private equity funds concentrating on the Greater China region raised just $1.7 billion in the first quarter of 2022, according to estimates from industry data provider Preqin, down more than 90% year on year. That marked the smallest haul since the depths of the global financial crisis in 2009.
The steep drop in fundraising by the type of early-stage investors who helped Alibaba and Tencent become global brands underscored growing uncertainty over how to operate in China.
Since the start of a regulatory clampdown by the country’s government last summer, top officials have discouraged disruptive profit-seeking by fast-growing start-ups and imposed stringent security reviews. These curbs have halted most offshore listings until Chinese regulators release more details on rules for foreign initial public offerings.