Funding for start-ups in China remains at a low, although the amount raised in the first half is already more than 50% of 2023’s total, suggesting a potential recovery, according to mergers and acquisitions (M&A) intelligence provider Mergermarket. The amount raised in the country peaked at USD132.7 billion in 2021, then dropped to USD67 billion and USD45.4 billion in 2022 and 2023 respectively, according to data presented at the company’s AVCJ Private Equity Forum China in Beijing. From January to June this year, total start-up funding raised in China reached USD25.7 billion. Despite that, the market remains sluggish compared with the pre-pandemic era, though there may be a recovery this year. “Funding in China may see a slight recovery this year after two years’ decline since 2021,” Wang Yiqing, Managing Editor at Mergermarket in Asia-Pacific, said at the Beijing event.
Another trend is that dollar-denominated funds have played a much smaller role. Dollar-based funds raised USD2.6 billion, accounting for only 2.5% of the total in the first half of 2024, compared with 44% in 2021, Mergermarket data showed, as reported by the South China Morning Post.
But the China Daily reports that many start-up are still advancing. Autonomous driving startup TuSimple Holdings is making progress in the fast-growing artificial intelligence-generated content (AIGC) segment. The company aims to promote the commercial application of its generative AI technology in the animation and video game industry. Lyu Cheng, President and CEO of TuSimple, said the company has set up a new business segment focusing on generative AI applications in animation and video games. TuSimple has utilized generative AI in its development of autonomous driving since early 2022, including the research and development (R&D) of large language models that incorporate key generative AI technologies. Founded in 2015, TuSimple has developed autonomous driving solutions for long-haul heavy-duty trucks.
