China’s venture capital market presented a mixed picture in the first eight months of 2025, with a modest three per cent year-on-year rise in deal volume contrasted by a sharp 36 per cent fall in the total value of funding. The findings, from data and analytics company GlobalData, suggest a growing caution among investors, with fewer large-scale deals being announced compared to the previous year.
The decline in overall funding value is attributed to a combination of macroeconomic headwinds, regulatory uncertainties, and geopolitical tensions, which have curbed the appetite for big-ticket funding rounds.
A widening gap between deal volume and value
According to the analysis, the divergence between the number of deals and their collective value points to a significant market recalibration. While investors remain active in the Chinese market, their focus has shifted towards smaller, more selective, and conservative investments.
“The modest rise in deal volume shows that investors remain active, though with greater selectivity and caution,” commented Aurojyoti Bose, lead analyst at GlobalData. “In contrast, the steep decline in funding value points to a slowdown in big-ticket rounds and persistent investor wariness. Macroeconomic uncertainty, geopolitical tensions, and regulatory pressures have further dampened sentiment, curbing appetite for big deals and driving more conservative investments.”
The report highlights a notable absence of billion-dollar funding rounds so far in 2025, a stark contrast to 2024 when several such deals were announced. While there were some significant deals in the first eight months of the year, including a $700million raise by SJ Semiconductor and $460million secured by Zhibu Internet, the overall trend has been towards smaller investment sizes.
China’s diminishing share of global VC funding
While China remains a key player in the global venture capital landscape, second only to the US in both deal volume and value, its share of the global funding value has decreased significantly.
An analysis of GlobalData’s Deals Database revealed that China accounted for approximately 17 per cent of the total number of VC deals announced globally between January and August 2025. However, its share of the total global funding value stood at around seven per cent, a sharp drop from the 14 per cent it held during the same period in the previous year.
“The widening gap between deal volume and value highlights a market recalibration,” Bose concluded. “Investors remain engaged, but their focus has shifted toward smaller, more measured bets. Until confidence in larger rounds returns, China’s VC landscape is likely to prioritize resilience and selective opportunities over aggressive capital deployment.”
