China Leads Asia’s Venture Downturn — But Other Countries Didn’t Help

Chris Metinko

Last year the Asia funding market tanked, reaching only $65.8 billion — the exact same low the market hit in 2014.

While the fourth quarter showed a little resilience — bouncing back after a slow Q3 — the Asia venture market has proven a bumpy, if not entirely closed, road for investors in the past year.

However, a Crunchbase data analysis shows that while China’s declining venture market pulled Asia’s numbers down, other countries also slumped.

So with that, let’s take a look at the region by examining some of its biggest venture markets by country.

China

China’s venture market was brutal in 2024 — hitting its lowest venture funding total since 2014, when only about $20 billion was invested, according to Crunchbase data.

Overall, venture funding in China plummeted 32% from 2023, hitting only $33.2 billion last year.

Despite the drop, China did see four of the six $1 billion-plus rounds to Asia-based startups last year:

In February, artificial intelligence startup Moonshot AI raised more than $1 billion in a funding round led by Alibaba Group and HongShan, formerly Sequoia Capital China.
In March, Zhiji Automobile, a developer and manufacturer of electric vehicles, raised a $1.1 billion Series B.
Also in March, ChangXin Memory Technologies, a maker of dynamic random-access memory semiconductor products, raised $1.5 billion in a venture round.
And in December, Avatr, an electric vehicle brand, raised a Series C worth approximately $1.5 billion.

If there is any good news, it’s that China’s venture market saw a slight rebound in Q4 from a dreadful Q3. In the final quarter of last year, a total of $7.3 billion was invested into China-based startups — a 20% increase from Q3, but a whopping 46% drop from the $13.6 billion Q4 2023 saw.

Nevertheless, China’s “deflationary spiral” — a downward economic cycle where prices fall, leading to lower production and wages — and investors’ reaction to it are clearly crippling the region’s venture market.

Of course, geopolitical tensions with the U.S. and its allies and China’s tightening ties to Russia are only adding more uncertainty to the world’s second-largest economy.

Singapore and Israel

It would be insincere to downplay China’s role in Asia’s venture market. Just a quick glance at the numbers show it is about half of the region’s entire VC ecosystem. No other country’s increase or decrease in venture dollars can really move the needle much in the region, and certainly not to the degree the Red Dragon can.

Still, other countries also participated in the region’s venture downturn, including two known for their startup scenes: Singapore and Israel.

Singapore saw the bigger decline, with VC-backed startups there raising only $4.9 billion last year — a 39% decline from the $8 billion invested in the country in 2023 and a massive drop from the $12 billion witnessed in 2022.

The country did see one massive raise in October, when Singapore-based GDS International, a developer and operator of data centers, raised $1 billion from institutional private-equity investors.

Singapore actually saw a nice uptick in Q4 last year, raking in $1.5 billion — more than double the $600 million it saw in Q3. However, even that number is lower than the $1.7 billion it saw in Q4 2023.

Similarly, Israel’s vaunted venture market also took a hit in 2024 while the country was mired in violent conflict with Hamas and other groups in the Middle East.

Investors only put $3.1 billion in funding into Israel-based startups last year — a 26% drop from the $4.2 billion in 2023 and down about 63% from the $8.4 billion raised the year before, Crunchbase data shows.

The country’s largest rounds went to InSightec, a developer of ultrasound technology devices for image-guided acoustic surgery that raised a $150 million private equity round in June, and AI chipmaker Hailo, which locked up a $120 million extension of its $136 million Series C that minted it a unicorn back in 2021.

What’s up?

That said, not all countries in the region saw their venture funding totals decline.

Asia’s second-largest venture market, India, saw a modest 5% increase in its 2024 total, finishing with $13.2 billion of venture dollars invested in domestic startups. Last year’s numbers included a $1 billion venture round in January for SAEL, a renewable energy company based in New Delhi.

However, the biggest increase from one of Asia’s major venture markets came from Japan. That market saw a 62% boost from 2023 to $4.2 billion. The venture total is the highest for the country since 2021 when $4.4 billion in venture capital was invested in Japan.

However, even Japan’s significant jump couldn’t come close to erasing China’s diminishing numbers. In fact, no country will be able to overcome that nation’s huge dip — and Asia’s funding numbers won’t see any type of rebound until China’s economy sees a major turnaround.