China VC funding surpasses North America for the first time in Q2

In the second quarter, China-based
companies recorded $30.9 billion of
venture-capital investment, higher than North America’s $27.2
billion, according to data from Goldman Sachs. 

Notably, ANT Financial, the Alibaba affiliate that runs
China’s largest online-payments platform, raised a $14
billion Series C round, the largest-ever deal in the history
of VC funding, Goldman said.

“While corporate venture capital has been a major
driver of growth in venture as an asset class globally,
nowhere has that been more evident than Asia, where
Alibaba, Baidu, JD.com, and Tencent have followed the
lead of SoftBank, creating massive ecosystems of venture
investments under their umbrellas,” said a team of
analysts led by Heath Terry in a recent note to
clients.

“Nearly every major private company in China
has at least one of those five companies as an investor,
and the level of influence these ecosystems have in steering
the development of new technologies and business models is
unprecedented.”

Investments from Chinese giants span across areas from
fintech to logistics, and are often used to widen their
industry footprints. One way they’re doing this is by funding
competitors in the same industries. 

“For instance, Ofo and Mobike (acquired by Meituan-Dianping),
which are the top bike sharing brands in China, each received
funding from Tencent in the past,” Heath said.

“Similarly, Baidu Waimai, an online food delivery business
once backed by BATJ, merged with Ele.me which counted
Alibaba, JD.com and Tencent among its investors.
Ele.me has since then been fully acquired by Alibaba.”