SA国际传媒

Despite a slight resurgence across the global venture funding landscape, Asia seems to be left behind.

The region suffered its worst quarter for venture funding since the final quarter of 2015, with Asia-based startups raising only $14.6 billion 鈥� a 24% decline from Q1 and a 32% dropoff year to year.

In addition, deal volume in the region continues to decline, with only 1,511 funding deals announced in Q2. That number represents a 15% drop from Q1 and a more pronounced 27% fall from Q2 last year.

Late-stage rounds continue to slide

Of course, what really moves the needle are the late-stage growth rounds. However, growth rounds in Asia totaled only $14.6 billion 鈥� the lowest in a quarter since 2019.

That number represents a steep decline of 24% from Q1 and an even bigger 32% dip from Q2 2023.

Unlike other regions that saw billion-dollar rounds, Asia was left out of the big-money craze, although there were a handful of deals in the quarter worth more than a half-billion dollars:

• China-based , an electric-vehicle startup, locked up a $690 million venture funding round.
• Indian grocery delivery startup raised a $665 million round, doubling its valuation to $3.6 billion.
• China-based , a semiconductor company focused on chipsets in mobile communications and IoT, raised a round worth approximately $552 million.

Dealmaking volume also fell, with only 134 late-stage growth rounds in Q2. That鈥檚 a 21% drop from Q1 and a 14% decline year to year.

Early-stage funding suffers

While any type of significant decline in venture is almost always directly attributable to late-stage funding, there also was an eye-catching fall in early-stage dealmaking.

Early-stage dollar volume fell to only $4.9 billion 鈥� a staggering 53% decline from the first quarter and a 39% dive year to year.

Dealmaking volume diminished only slightly, with 539 rounds being announced in Q2. That number reflects declines of only 7% from Q1 and 16% from Q2 of last year.

Seed does not sprout

To be honest, with the above numbers looking like they do, seed and angel funding certainly weren鈥檛 going to save the region鈥檚 venture funding totals. While such rounds may produce interesting deals, they are not big money.

Angel and seed actually were up slightly both quarter to quarter and year to year, totaling $1.9 billion 鈥� slightly above Q1鈥檚 $1.7 billion.

However, deal flow shrank to only 834 deals 鈥� a 19% drop from Q1 and a 34% decline from Q2 2023. In fact, it鈥檚 the lowest amount of seed and angel deals in at least a few years.

Decline by country

This region is dominated by one player: the Red Dragon.

That dragon did not breath fire this past quarter, as venture funding in China plummeted. Venture funding in the country hit only $6.9 billion 鈥� down an eye-popping 46% from Q1 and 33% from Q2 2023.

India, by far the region鈥檚 second-largest venture market, saw $3.4 billion of funding. That represents a 27% uptick from Q1, but a 9% drop from Q2 last year.

What it means

The shrinking of the venture market through the last handful of quarters is shocking. While everyone knew 2021鈥檚 high could not be sustained, it seemed inevitable the drop in dollar volume would subside.

However, despite a brief respite in the middle of last year, the market has continued in reverse and seems to be entering back to where it was a decade ago.

Even AI 鈥� the latest craze among all venture capitalists today 鈥� could not save the Asian venture market. AI-related startups in the region raised only about $2.5 billion, . That鈥檚 a pittance when compared to North American AI-focused startups, which.

While some AI firms, such as China鈥檚 and South Korea鈥檚 , raised big rounds well over nine figures, there just simply were not enough of them.

The trade and investment tensions between China and the West, along with the region鈥檚 continuing rocky economy, are not helping.

China鈥檚 regulatory policies around venture and IPOs likely also have not helped, but recently there have been of officials willing to change that to jump-start the declining market. It was recently that mainland China IPOs raised only $4.6 billion in the first six months of the year 鈥� a drop of 85% from H1 2023.

Such actions likely will be needed if the region is to stop its downward tumble.

Methodology

The data contained in this report comes directly from SA国际传媒, and is based on reported data. Data reported is as of July 7, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. SA国际传媒 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to SA国际传媒 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. SA国际传媒 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. SA国际传媒 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Illustration: