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Crunchbase’s aggregated venture funding data which is, current as of this morning, shows that Chinese startups raised more venture capital than American startups so far in 2018. This is a slightly different, more precise follow-up to previous work by Crunchbase and others that documents China’s ascendant position in the global venture market.
At roughly $2.2 billion, the gap in funding is quite notable.
Much of that difference can be linked to just a few supergiant venture rounds of $100 million or more. It’s a phenomenon Crunchbase News has covered in depth, and it’s a trend that’s still very much happening in recent months.
This includes hypergiant $1 billion venture rounds raised by Sensetime (based in Beijing) and Singapore-based Grab, in addition to rounds raised by Letgo (U.S.), Souche (China), Peloton (U.S.), and many others that were at or above $500 million.
Concerning rounds of that scale, a $2.2 billion gap in funding doesn’t seem like much. Only a few big rounds here or there could tip the balance in a big way. However, the current $2.2 billion difference is much narrower than at other times of the year.
The shift from a U.S.-led startup ecosystem to one that China leads is a remarkable shift. Even more so if China keeps the lead through the year’s end.
However, there is more to the story than just the raw dollar figures.
For the whole time except a few weeks at the beginning of the year, and one short period at the beginning of June, Crunchbase data shows that Chinese startups, collectively, have been more prodigious fundraisers than those from the U.S.
For example, the largest-ever VC deal closed to date happened when $14 billion was raised during a Series C round by Hangzhou, a China-based Ant Financial in Week 23 of this year. That round was co-led by two investment companies owned by the Singaporean government: Temasek Holdings and GIC.
However, in almost all aspects, the gap between U.S. and Chinese venture funding doesn’t matter. Why? A lot of the top-funded private companies in these countries are not directly competing in the same markets. And many American investors and entrepreneurs see the international adoption of the U.S. model of venture capital in a positive way.
What’s more, China isn’t skating past the U.S. while the U.S. is down. The American venture market is still remarkably strong as of now.
There are still questions, such as which ecosystem is more overheated? Will Chinese government intervention and rule-making disrupt its domestic technology market? And can Chinese-headquartered companies win outside of their own borders? Those questions and more will ascertain which market keeps winning in the long-run.