China’s startups and tech giants raised an all-time high of US$58.8 billion in disclosed investments last year, topping the 2016 record of US$2.7 billion, Tech in Asia data shows.
Chinese ride-sharing giant Didi Chuxing raised the biggest amount, US$9.5 billion.
In terms of sectors, logistics and transportation attracted US$16.8 billion, the biggest funding, just as it did in 2016, thanks to the contribution of the ride- and bike-sharing startups.
It is followed by e-commerce, which raised US$12.7 billion, and the fintech sector, with US$4.8 billion in capital raised.
Hardware and general internet services are also among the top five sectors, raising US$2.6 billion and US$2.5 billion respectively.
The year 2017saw a record-high average funding round of US$33.6 million, while the largest single investment of US$5.5 billion went to Didi Chuxing.
The ride-hailing giant intends to use the new capital to build “intelligent transport ecosystems” by deploying artificial intelligence and deep learning, establosh a self-driving car research lab, and acquire Brazilian ride-hailing app 99 as part of its bid to gain a foothold on the fast-growing Latin America market.
In 2017, initial coin offerings (ICO) raised billions of funds for startups issuing crypto-tokens. While the figures from Tech in Asia did not include money raised through an ICO, there were 65 coin offerings raising over US$394 million in the first half of 2017, before the Chinese authorities effectively banned the fundraising scheme in September.
Last year also saw vast amounts of China’s tech funding going to the traditional retail sector amid efforts to boost online-offline shopping.
In pushing its “New Retail” strategy, Jack Ma’s Alibaba is stepping up the opening of more HEMA supermarkets, which offer scan-and-deliver, uni-channel O2O shopping experience to consumers.
In November, the e-commerce giant invested US$2.9 billion for a major stake in Sun Art Retail Group, the country’s top hypermart operator, as part of its push into the offline retail market. The group also rolled out Tao Café and other cashier-free retail stores last year.
Rivals Tencent and JD.com are also jumping into the fray, with JD.com targeting to open over 1,000 7Fresh grocery stores, which feature self-steering shopping carts, in three to five years.
This article appeared in the Hong Kong Economic Journal on Jan 9
Translation by Ben Ng
[Chinese version 中文版]
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