Last yr, the fund market in Asia grew, reaching just $65.8 billion – the very same low that the market hit in 2014.
While the fourth quarter showed some resilience – bouncing back after a slow quarter – the Asia Venture market proved to be a bumpy, if not entirely closed, yr for investors last yr.
However, an evaluation of Crunchbase data shows that while China’s shrinking venture market has dragged down Asia’s numbers, other countries have also fallen.
Let’s take a look at this region by examining some of its largest venture markets by country.
China
According to Crunchbase data, China’s venture market in 2024 – reaching its lowest funding level since 2014, when only about $20 billion was invested.
Overall, venture financing in China dropped 32% from 2023, reaching just $33.2 billion last yr.
Despite the decline, China saw 4 of six $1 billion rounds for startups from Asia last yr:
- In February, an artificial intelligence startup Moon Ai raised over $1 billion in a funding round led by Alibaba Group AND Hongshanformerly Capital Sequoia Capital China.
- In March, ZHIJI Automobiledeveloper and manufacturer of electrical vehicles, raised $1.1 billion Series B.
- Also in March, Changxin Memory Technologiesmaker of dynamic random memory semiconductor products, raised $1.5 billion in a venture round.
- And in December Avatrelectric vehicle brand, raised a Series C round price roughly $1.5 billion.
If there’s any excellent news, the Chinese venture market saw a slight rebound in the fourth quarter from a terrible Q3. In the last quarter of last yr, a total of $7.3 billion was invested in Chinese startups – a 20% increase from Q3, but a massive 46% decline from $13.6 billion in 2023.
Nevertheless, China’s “deflationary spiral” – a downward economic cycle in which prices fall, leading to lower production and wages – and investor response to it clearly defines the region’s venture market.
Of course, geopolitical tensions with the U.S. and its allies and China’s heightened ties with Russia only add to uncertainty for the world’s second-largest economy.
Singapore and Israel
It can be unlucky to desert China’s role in the Asian venture market. A fast look at the numbers shows that this is roughly half of the entire VC ecosystem in the region. No amount of increase or decrease in venture dollars can truly move the needle in the region, actually to not the extent that the Red Dragon can.
Still, other countries have also participated in the region’s slowdown, including two known for their startup scenes: Singapore and Israel.
Singapore has seen a larger decline, with VC-backed startups raising only $4.9 billion last yr – a 39% decline from the $8 billion invested in the country in 2023 and a huge decline from the $12 billion seen in 2022 r.
The country saw one huge hike in October, when based in Singapore GDS Internationaldata center developer and operator, raised $1 billion from institutional private investors.
Last yr, Singapore actually saw some nice growth in the fourth quarter, earning $1.5 billion – greater than double the $600 million it saw in the third quarter. However, even that number is lower than the $1.7 billion it saw in Q4 2023.
Similarly, Israel’s expansive venture market also hit 2024 while the country was embroiled in violent conflict with Hamas and other groups in the Middle East.
Last yr, investors poured just $3.1 billion into Israeli startups – down 26% from $4.2 billion in 2023 and down about 63% from the $8.4 billion raised a yr earlier, data shows Crunchbase.
The country’s biggest rounds hit Insightdeveloper of ultrasound technology devices for image-guided acoustic surgery, which raised a $150 million private equity round in June, and AI Chipmaker Hailowhich locked in a $120 million extension to a $136 million Series C that catapulted it into a 2021 unicorn.
What’s up?
That said, not all countries in the region have seen a decline in venture funding.
Asia’s second-largest venture market, India, saw a modest 5% growth in the 2024 total, ending with $13.2 billion in investment dollars invested in domestic startups. Last yr’s numbers included a $1 billion venture round in January CruelNew Delhi-based renewable energy company.
However, the biggest growth relative to one of the fundamental markets of the Asian venture comes from Japan. This market grew 62% from 2023 to $4.2 billion. The venture total is the highest for the country since 2021, when $4.4 billion in investment capital was invested in Japan.
But even Japan’s significant jump couldn’t come near dislodging China’s dwindling numbers. The reality is that no country will give you the chance to beat this nation’s massive decline – and Asia’s financing numbers won’t see any rebound until China’s economy sees a significant turnaround.