Venture funding for startups in China is dwindling.

Venture funding for Chinese startups is on track to hit its lowest level in a decade, with early-stage investment in the country continuing to decline sharply. Last quarter, total funding dropped to just $7.4 billion, marking a 42% decrease from the $12.8 billion invested in Q1 and the lowest figure since Q3 2014, according to Crunchbase data. This decline puts 2024 on course to be China's weakest year for venture funding since 2014 when slightly over $20 billion was invested.

These figures highlight the broader challenges in Asia, where startups saw their worst quarter for venture funding since late 2015, with only $14.6 billion raised. The significant drop in early-stage funding has been particularly impactful. In Q2, early-stage funding fell to $2.5 billion, the lowest in a decade and a 67% decline from Q1's $7.6 billion.

This steep decline in early-stage investment suggests that fewer companies will likely pursue large growth rounds, traditionally where substantial venture capital is concentrated. While growth rounds—encompassing late-stage and technology-growth rounds—haven't completely collapsed, they have significantly declined. In Q2, these rounds totaled $3.9 billion, a 13% drop, and were significantly lower than the $10 billion raised in Q3 and $7.8 billion in Q4 of last year.