The year of 2019 was said to be the capital winter in China. Under the influence of tighter domestic monetary control, global trade uncertainties, and worldwide economic woes, investors have become more cautious: the number of financing events this year stood at 7,797, a quarter less than that of 2018. Total investment volume also decreased by 23% to USD 315 billion, as business information provider IT Juzi’s data shows.
That said, one silver lining in China’s sluggish startup investment scene is that startups offering digital tools or business solutions to businesses are bucking the trend. In addition, health tech startups, such as online medical consulting, also received the biggest attention from the VCs.
The three internet giants in China, Tencent, Alibaba, and Baidu (acronym as BAT) have reined in their wide-casting corporate venture capital (CVC) as well. Shenzhen-based Tencent, which ranks number two on Hurun’s global top unicorn investors list, invested less than half of the amount of money it did in 2018. Global deal volume also dropped more than a third from 2018’s 162 to 108 in 2019.
Despite the differences in their business models, BAT shares a similar investment strategy in 2019: strengthen their core businesses while lay out future opportunities. The enterprise services industry had a total of 28 investments from BBAT (counting ByteDance in), with almost half of which coming from Tencent, as the database reveals.
Besides building better enterprise-oriented service networks, entertainment, transportation (ride-hailing, automatic vehicle, and more), hardware and education were also hot subjects on these CVCs’ watchlists.