Greater China Deals Barometer Report: Startup financing rises 36.5% to $3.6b in Sept

Investment activity in Greater China recovered in September after a dip in the previous month, but market fluctuations could continue to weigh on fundraising efforts over the coming months.

Startups headquartered in the region collectively raised almost $3.6 billion through the completion of 222 investments in September, marking a 36.5% increase in deal value and a 7.2% uptick in deal volume from August, according to DealStreetAsia’s proprietary data.

On a year-on-year (YoY) basis, this September fared better with Greater China-based startups raising 18.9% more financing than their counterparts in the same period last year. The number of deals also grew significantly by 54.2% YoY.

In September 2024, just over $3 billion was raised across 144 investments in Greater China-based startups.

However, market volatility persisted amid geopolitical risks and uncertainty in the global trade environment. Domestically, weakness in the property sector and a cautious recovery in consumer confidence, despite a broad stimulus package by the Chinese government, have continued to dampen investor appetite for big-ticket transactions.

As a result, fundraising by Greater China-based startups in the first nine months of 2025 dropped 20.6% YoY to $33.2 billion, even as  dealmaking activity remained resilient with the completion of 1,855 investments in the January-September period, up 13.6% from 9M 2024.

Active dealmaking in materials, biotech

While startup financing takes time to return to pre-pandemic highs, some areas show promise as the government pushes ahead with supportive policies and generous state funding to make China the global leader in deep technologies.

September saw private-market investors actively make transactions in largely established yet privately-held advanced material developers and manufacturers, many of whom supply to clients in the semiconductor and clean-tech sectors.

China’s rapidly evolving manufacturing strengths that increasingly feature cost-effectiveness, large-scale automated production, skilled labour, precision engineering, and high-tech innovations turned materials the month’s most sought-after investment segment with 27 transactions.

Ranking second was biotech, with 24 transactions in September, as the industry became one of the very few areas in Greater China with continued interest from US dollar investors.

Although no hundred-million-dollar deals happened in the month, sizeable investments such as AccurEdit Therapeutics’ $75-million Series A round and Epigenic Therapeutics’s $60-million Series B round showcased market enthusiasm in backing China’s biotech potential fuelled by its growing biotech talent pool, efficient clinical trial systems, and capabilities in developing high-value novel drugs.

Aerospace raises biggest cheques

In terms of deal value across industries, while semiconductor continued to gather massive capital, the aerospace industry, including particularly commercial launch developers, amassed the largest pool of startup financing.

A total of $778.9 million flew into aerospace in September, making it the best-funded industry of the month. Top aerospace fundraisers, including Galactic Energy and Geespace, secured $336.8 million and $280.7 million, respectively, as their deal sizes were also September’s biggest across all sectors.

Galactic Energy hired Huatai United Securities on October 22 for its pre-listing tutorials, as the Beijing-based private space launch unicorn officially moved towards a domestic initial public offering (IPO).

Now on the back of predominantly local and state funds investing in Chinese yuan, the country’s commercial space industry has grown from almost non-existent a decade ago to a vibrant ecosystem with more IPO-ready companies.

i-Space, which raised $98 million in an extended Series D round in September, also announced its plan for a public listing on Shanghai’s Nasdaq-style STAR Market. Other commercial space companies on the same IPO path include LandSpace Technology, Minospace, Space Pioneer, and YEE Space, just to name a few.

Megadeals contribute to over a third of financing

Compared with August when just three megadeals were recorded, September saw the completion of seven transactions worth $100 million and above, which contributed significantly to the 36.5% rise in month-over-month (MoM) deal value.

Besides the two biggest investments in commercial space companies Galactic Energy and Geespace, the remaining five megadeals happened across semiconductor, business support services (specifically, developers of robotics & drones primarily for commercial uses), and auto & parts.

The seven megadeals raked in close to $1.4 billion, representing about 38.8% of September’s fundraising total.

Startup incubation and early-stage dealmaking remain long-term bets, despite a challenging macro environment.

Across different funding stages, early-stage dealmaking at Series A round and before accounted for 55.4% of the overall deal count. At more than $1.1 billion, the fundraising sum at the Series A and earlier stage marked nearly a third of the month’s total.

Much like the global market, startup financing in Greater China has been volatile over the past months. And it is likely to remain uncertain for the rest of 2025 amid evolving dynamics.

Its outlook is shaped by an interplay of domestic and international factors including the ongoing tariff negotiations between the US and China as well as Beijing’s fiscal policy and other stimulus packages, among others.

Note: In our monthly analysis for September 2025, we have put together detailed charts of prominent deals, deal stages, and the most attractive sectors 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.