China Share Of Supergiant Rounds Slips Further

This year has not been kind to China in terms of its companies pulling in large rounds of venture capital. There have been big rounds (think $500 million, $700 million) but not nearly as many as there were just last year.

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At the end of Q2, we wrote about how China had fallen behind the United States and the rest of the world in terms of the number of supergiant venture rounds its companies were pulling. We define “supergiant rounds” as those of $100 million or more. It’s an eye-popping amount, yet at the same time, supergiant rounds have become more and more common as ample amounts of capital slush around in the market.

And now that Q3 has ended, we’re here to report that China’s third-place spot hasn’t changed.

Companies based in the United States brought in the largest number of supergiant rounds during the third quarter, with 62 rounds going to the U.S. That’s down slightly from last quarter when U.S.-based companies raised 66 supergiant rounds over the course of the three-month period.

China’s supergiant round status stayed about the same during Q3 as it did for Q2—there were 21 supergiant rounds in Q3, as opposed to 20 in Q2.

The number of supergiant rounds in China hit its peak during the third quarter of 2018. That number’s seen a significant dip from 50 rounds in Q3 ‘18 to 21 supergiant rounds in Q3 ‘19.

But even at its peak in 2018, China had fallen behind the United States for the number of mega-rounds. It was still ahead of the rest of the world until the beginning of this year when China fell to third place.

China Lags

2019 hasn’t been a great year in terms of U.S.-China trade relations, and that could very well be a factor in China’s dip to third place.

The largest venture round for Q3 was Argo AI’s $2.6 billion raise. The self-driving technology company now has $3.6 billion in total known funding. And since Argo is based in Pittsburgh, that means the U.S. was the country to have a company pull in the largest funding round these past three months.

The largest venture round to go to a Chinese company during Q3 was NetEase Cloud Music’s $700 million Series B. That number is nothing to sniff at, but it’s worth noting that China didn’t have any funding rounds that cracked the $1 billion mark.

China’s produced a number of startups that have become hugely popular both domestically and around the world (perhaps most notably ByteDance, the parent company of popular video-meme app TikTok). The third quarter also saw Chinese companies list on American stock exchanges or take the first steps to do so (think 9F and 36Kr).

Venture dollars are also still flowing to the Chinese companies. But the big rounds—just more than half of them—are still being pulled in by U.S. companies.

Now that Q3 is done, Crunchbase News will have more analyses on quarterly trends in the upcoming days. Stay tuned for more Q3 action.

Illustration: Dom Guzman