Chinese VC funding is challenging Silicon Valley

Wisemarko

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Silicon Valley Powered American Tech Dominance—Now It Has a Challenger
An exclusive WSJ analysis shows how venture-capital investment from Asia is skyrocketing, threatening to shift power over innovation



Venture capital by place of origin, in billions
$67
$30 $38
U
S. Japan. China
Note: Bands represent the amount of investment led by investors of each country, ranked in order from the top for each year.

Source: WSJ analysis of VentureSource data


Silicon Valley, long the undisputed king of venture capital, is now sharing its throne with Asia.

A decade ago, nearly three-quarters of the world’s financing of innovative, tech-heavy startups and young companies took place in the U.S., with American investors plowing money into mostly U.S.-based venture firms.

Now, a surge of new money—mostly from China—has helped drive funding totals into the stratosphere and has transformed the venture landscape, according to an exclusive Wall Street Journal analysis of venture funding data.

Asian investors directed nearly as much money into startups last year as American investors did—40% of the record $154 billion in global venture financing versus 44%, the Journal’s analysis of data from private markets data tracker Dow Jones VentureSource found. Asia’s share is up from less than 5% just 10 years ago.

That tidal wave of cash into promising young firms could herald a shift in who controls the world’s technological innovation and its economic fruits, from artificial intelligence to self-driving cars.

Growing Competition
U.S. investors now lead less than half of all venture finance, while China's share is nearly a quarter and growing fast.

Venture capital by place of origin, share of total

U.S.

In 2017

China

44%

Japan

Mixed

Europe

In 1992

Other Asia

97%

Others

24%

12%

7.8%

7.1%

3.3%

1.8%

’05

’10

’15

2000

1995

Note: Bands represent the amount of investment led by investors of each country as a share of total, ranked in order from the top for each year.

Source: WSJ analysis of VentureSource data

Silicon Valley previously was far and away the leader for tech entrepreneurs in both money and know-how, says Kai-Fu Lee, a veteran tech executive who headed China units of Microsoft and Google before founding his own Beijing-based venture-capital firm, Sinovation Ventures, in 2009. The rise of China’s venture market “signifies a shift from a single-epicenter view of the world to a duopoly,” he says.

U.S. investors remain the biggest single source of global venture capital, and they do more deals than anyone else—nearly half of all venture rounds in 2017, according to VentureSource data. The U.S. is still an important driver of innovation, with many of China’s bigger investments merely copying American technologies. For startups, the big increase in Asian funds also makes more cash available to finance new technology.

https://www.wsj.com/articles/silico...tup-fundingnow-it-has-a-challenger-1523544804
 

mattster

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its not just venture capital that makes Silicon Valley......its good universities, climate, and the kind of multicultural environment, open and free society, culture, music, art, food, etc and use of the English language that makes people and the best talent from all over the world want to go there.

Who wants to go and live in Beijing or Shanghai ? China and its repressive culture, society has zero appeal for talented foreigners unless they pay a ton of money. Even then many Westerners who moved to China want to leave.

It needs to be a free-wheeling society where people can express themselves freely without fear of being arrested, blacklisted or made to disappear. That's why even Singapore and Taiwan and Japan cant re-create a Silicon valley type environment......these societies are too regimented and more importantly their Asian culture that values discipline, hierarchy over other values.
 

Armand2REP

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its not just venture capital that makes Silicon Valley......its good universities, climate, and the kind of multicultural environment, open and free society, culture, music, art, food, etc and use of the English language that makes people and the best talent from all over the world want to go there.

Who wants to go and live in Beijing or Shanghai ? China and its repressive culture, society has zero appeal for talented foreigners unless they pay a ton of money. Even then many Westerners who moved to China want to leave.

It needs to be a free-wheeling society where people can express themselves freely without fear of being arrested, blacklisted or made to disappear. That's why even Singapore and Taiwan and Japan cant re-create a Silicon valley type environment......these societies are too regimented and more importantly their Asian culture that values discipline, hierarchy over other values.
China don't mess with you unless you mess with China. The nice thing about it is most people mind their own business. The worst thing about it is no one cares whether you live or die. The tech scene in China is very hip with US graduates going back home to start app development companies. They are usually exact copies of apps you will find on Andriod translated into Chinese. There is nothing they can do as China has no IP protection. What we call third party app stores outside of China are THE app stores for China as they do not have Google Play Store. Most of what you want is on these app stores including bootleg copies of Android apps that don't require Google services or use Chinese services as a substitute. The Chinese smartphone users are really not missing out on anything because they have cloned the entire Google Play Store two even three times. Chinese apps cloned from Playstore are often cloned again if they get popular in China so you can have dozens of ripoffs of the same app. It truly is the Wild West over there, the only survivors will be those who pledge allegiance to their God, Xi.
 

Wisemarko

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its not just venture capital that makes Silicon Valley......its good universities, climate, and the kind of multicultural environment, open and free society, culture, music, art, food, etc and use of the English language that makes people and the best talent from all over the world want to go there.

Who wants to go and live in Beijing or Shanghai ? China and its repressive culture, society has zero appeal for talented foreigners unless they pay a ton of money. Even then many Westerners who moved to China want to leave.

It needs to be a free-wheeling society where people can express themselves freely without fear of being arrested, blacklisted or made to disappear. That's why even Singapore and Taiwan and Japan cant re-create a Silicon valley type environment......these societies are too regimented and more importantly their Asian culture that values discipline, hierarchy over other values.
Have you been to China? China has very strong tech startup scene with excellent infrastructure, well trained talent and funding. Chinese society is very progressive when comes to science and education. Just look at the world class companies mushrooming out of there (DJI, Xiaomi, Didi to name a few).
 

Armand2REP

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Have you been to China? China has very strong tech startup scene with excellent infrastructure, well trained talent and funding. Chinese society is very progressive when comes to science and education. Just look at the world class companies mushrooming out of there (DJI, Xiaomi, Didi to name a few).
He is Chinese... he is just playing dumb.
 

mattster

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I know he is Chinese. Yes...I have been to China. I'm not saying China has no tech scene, it has a fairly thriving tech scene with tons of government funding, etc. But China will never be able to attract the best talent from all over the world like Silicon Valley. Only chinese speaking people will be attracted to the idea of going to China.
 

Armand2REP

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I know he is Chinese. Yes...I have been to China. I'm not saying China has no tech scene, it has a fairly thriving tech scene with tons of government funding, etc. But China will never be able to attract the best talent from all over the world like Silicon Valley. Only chinese speaking people will be attracted to the idea of going to China.
The reason devs are not moving to China has nothing to do with the repressive culture or the pay. The people with the good ideas are not moving to China because they know their ideas will just get ripped off and have no recourse in the courts.
 

rockdog

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its not just venture capital that makes Silicon Valley......its good universities, climate, and the kind of multicultural environment, open and free society, culture, music, art, food, etc and use of the English language that makes people and the best talent from all over the world want to go there.

Who wants to go and live in Beijing or Shanghai ? China and its repressive culture, society has zero appeal for talented foreigners unless they pay a ton of money. Even then many Westerners who moved to China want to leave.

It needs to be a free-wheeling society where people can express themselves freely without fear of being arrested, blacklisted or made to disappear. That's why even Singapore and Taiwan and Japan cant re-create a Silicon valley type environment......these societies are too regimented and more importantly their Asian culture that values discipline, hierarchy over other values.
Yes, US no doubt has all those strength, but when we talking about Silicon Valley, we are talking mainly the IT/Internet industry; So i think you missed one major factor, the Market Size.

Technically, EU and Japan also are more advanced on certain IT area, but China as the biggest single consuming market (500 million mid class) would generate huge IT demands and innovations, that's why the there are 2 Chinese companies among top5 biggest internet giants in the world.

China is the only nation who has experience dealing with 1 billion class developing population, bring them affordable IT infrastructures and Internet services. That's why you can see the Chinese mobile brands are gaining 60% share in India and Afraica, and investing heavily on Indian's Internet firms such as paytm, flipkart...

And China's eCommerce GMV is twice as USA+Japan+Germany+UK, it's not only about sales, but also the tech behind them.
 
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