Greater China Deals Barometer Report: Deal volume hits one-year high, but fundraising cools in Jan

Startup funding volume in Greater China continued on its upward trajectory in January despite ongoing macroeconomic uncertainties and geopolitical tensions weighing on the market.

Privately held companies headquartered in mainland China, Hong Kong, Macau, and Taiwan kicked off 2025 by sealing 248 venture deals in January. The deal count—up 3.8% compared with December—continued a steady upswing that began in October 2024 and reached a 12-month high, show proprietary data compiled by DealStreetAsia.

That said, the deal volume is still below year-ago levels. The number of venture funding transactions last month was 9.8% less than the 275 deals sealed in January 2024. 

At $2.9 billion, the total funding proceeds were 73.5% less than the record-setting December 2024 when almost $11 billion was raised.

In particular, investors held back from signing off on megadeals—transactions worth at least $100 million.

Investors have been exercising caution given the unpredictability in the policies of Donald Trump, who commenced his second term as US President on January 20. China imposed tariffs against a number of US products in February in retaliation against Trump’s 10% tariff on Chinese goods imposed on February 1.

The tit-for-tat between Beijing and Washington is set to continue. 

Temasek backs battery materials maker

Unlike the EV sector-led megadeal bounty of December 2024, January saw only seven megadeals that raised a combined $843.2 million, or 29% of the month’s total deal value. What’s more, billion-dollar deals were completely elusive. In comparison, there were 14 megadeals in December including four transactions north of $1 billion. 

Inventchip Technology, which provides silicon carbide (SiC) power devices and integrated circuit solutions, sealed the biggest venture deal of the month. The firm bagged 1 billion yuan ($137.5 million) in the first tranche of its Series C round led by the state-owned National Manufacturing Transformation and Upgrading Fund. 

The second largest deal of the month was clinched by the advanced battery materials maker Yangzhou Nanopore Innovative Materials Technology, in which Singapore state investor Temasek led a 1 billion yuan ($137.2 million) Series A+ financing round.

The rest of the megadeals were scattered across sectors including software, automobile parts, robotics, and biotechnology. 

Early-stage investments dominated the country’s venture scene, accounting for 48.4% of the total deal count, despite contributing only $950 million, or 32.7% of the month’s total proceeds.

January saw an uptick in late-stage dealmaking, with a total of seven transactions taking place at Series E or later stages.

Chinese listings in Hong Kong and the US have been on an uptrend since the second half of 2024. The momentum, which is expected to sustain in 2025, bodes well for late-stage dealmaking.

List of megadeals in China (Jan 2025)

Five HK startups capture investor attention

Hong Kong emerged as one rare startup hotspot in January as a total of five startups based in the city snapped funding from a mix of international and local investors in the month. These are AI-driven drug discovery firm Insilico Medicine; construction tech Varadise; insurtech firm AIFT; luxury watch platform Wristcheck; and electricity-free cooling technology firm i2Cool.   

The five deals recorded in January were far more than the four investments into Hong Kong-based firms seen in Q4 2024. 

Two Chinese tech firms set up a presence in the city recently. 

DeepSeek, a Chinese AI firm that has taken the world by storm thanks to its success in developing language models that rival those developed by US tech giants, registered two firms in Hong Kong; while TikTok rival Xiaohongshu rented a 7,000-square-foot office in one of the city’s prime districts, Causeway Bay, according to two separate news reports.

Semiconductors continued to take the lead in deal count, with the completion of 39 transactions. But it remains to be seen if the sector will sustain the momentum seen in Q4 2024 when 96 deals were sealed. Q4 2024 saw deal count grow 20% QoQ but was still down 11.1% over the same period in 2023.

Top investor: Shenzhen Capital Group

Shenzhen Capital Group, a venture capital and private equity investment firm set up by the Shenzhen government in 1999, participated in six deals to top the investor list. The six investee startups raised a total of $44.8 million.

Formerly known as Shenzhen Innovation and Technology Investment Company, the firm covers equity investment, fund of funds, mutual funds, and asset securitisation, among others. It has assets under management of over 480 billion yuan ($65.7 billion), according to its website.

Most active investors in China (January 2025)

Note: In our monthly analysis for January 2025, we have put together detailed charts of prominent deals, active investors, deal stages, and the most attractive sectors that have bagged the maximum venture dollars in the Greater China region.

Our database only considers deals officially announced by the related investee, investor(s), and/or financial advisor, while information based on market rumours and news reports citing sources is excluded.

For a more detailed analysis, and to enable comparison between primary and secondary markets, DealStreetAsia has started tracking deals of all sizes since April 2020, as against considering only transactions worth more than $10 million earlier.

We have also introduced a standardised system for industry classification. It currently includes over 50 industries, as well as over 45 new economy and high-tech verticals, which will progressively increase to adapt to local market conditions in our closely watched regions of Greater China, Southeast Asia, and India.