- US-China tensions reshape VC landscape.
- Major firms split operations.
- Western investors reevaluate Chinese market presence.
Money talks, investors walk
The ongoing US-China trade dispute has reached a boiling point, prompting significant shifts in the venture capital landscape.
The Biden administration’s impending rules to limit investment in China’s tech sector have sent shockwaves through global VC and private equity firms.
Notable players like Sequoia Capital and GGV Capital have already split their operations, separating their US and Asian businesses.
Matrix makes moves
Matrix Partners recently joined the fray, rebranding its China and India arms to MPC and Z47, respectively.
This decision follows a broader trend of Western investors reevaluating their presence in China. US investments in China-focused VC funds plummeted from $16.5 billion in 2022 to a mere $1.2 billion in 2023 so far, according to Preqin data.
East-west exodus
The impact extends beyond VC firms. Several limited partners and institutional investors from the US, Canada, and Australia have halted investments or withdrawn from China entirely since March 2022.
Notably, US-based SOSV rebranded its China accelerator and ceased investments there, focusing on other markets instead.
However, some major players like Lightspeed Venture Partners and Picus Capital continue to operate in China, highlighting the complex nature of this evolving situation.
To read the original article: https://www.techinasia.com/visual-story/tech-investors-caught-uschina-trade-war?ref=featured-subex-0
