附近上门

Although the instituted by China鈥檚 government on some of its largest tech markets and companies have caught the attention of many in the industry, those in the investment world say not to expect money to be pulled out of the second-largest economy in the world.

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鈥淩ight now, on the new investment side, it鈥檚 business as usual,鈥� said a venture capitalist who asked not to be named, but whose firm invests in China and has fewer than a dozen investments in the country.

鈥淲e talk to our legal and banking friends every week, but right now it鈥檚 business as usual for us,鈥� the VC said.

That business seems pretty robust this year, according to 附近上门 data. Already this year, companies in China have seen about $35.6 billion in venture capital invested鈥攁lready surpassing last year鈥檚 total of about $29.1 billion.

Even in the last few months, when new regulations in China grabbed headlines–especially after the government announced it was investigating recently listed on suspicion it had violated data privacy and national security laws in early July鈥攙enture capitalists seem high on the market, with August seeing $5.7 billion in venture capital flow into the country鈥檚 companies, the second-best month so far this year.

Too big to fail

For the two-month period after the Didi IPO, U.S. investors, for instance, still participated in 24 funding deals worth approximately $2.4 billion in China. While that represents a drop from 33 deals worth $2.9 billion for the same period last year, it is still significant money.

A couple of the top rounds U.S. investors took part in in the last two months included two deals at $500 million or more:

• and participating in $700 million Series C last month; and
• 鈥檚 participation in electric-vehicle developer 鈥檚 $500 million seed round, also in August.

Those who watch the market in China are not anticipating those venture dollars to dip anytime soon or scare away foreign investors.

鈥淭he U.S. and Chinese economies are the two biggest in the world,鈥� said , co-chairman of , an Asian-focused audit and advisory firm with offices in China and throughout Asia. 鈥淐hinese companies are not just coming to the U.S. market鈥攖hey are being brought here by U.S. investors.鈥�

Bernstein said China-based companies with strong revenue growth, corporate governance and disruptive technology will continue to spark interest from VCs and other investors.

鈥淚n fact, the smaller unicorns and non-unicorns such as emerging growth companies have promising futures given their growth trajectories,鈥� he said.

New regulations an old story

, general partner at venture firm , is not surprised by what he sees in China right now. About two decades ago, he helped develop a presence in China by aiding in the growth of Asian networking company 鈥攁 joint venture between and 3Com鈥攁s well as managing its $250 million fund as a senior vice president.

He said while the new regulations鈥攚hich include China banning for-profit companies in the edtech industry, taking a minority stake in internet tech company , and both the U.S. and China adding significantly more scrutiny to companies looking to go public in the U.S. via the 鈥渧ariable interest entities鈥� model used by companies such as Didi and for overseas listings鈥攈ave grabbed attention, investors have been watching China tighten regulations around its growing tech economy since came to power in 2012.

鈥淭his really isn鈥檛 a new story,鈥� Bose said. 鈥淭he level of restrictions has expanded in the last several years leading to what we鈥檝e seen now.鈥�

Bose, whose firm invests in other parts of Asia but not China, said venture money should continue to come into China just because of its pure size, especially from investors with a long road map.

鈥淚 think for those that look at China as a long-term play, it probably doesn鈥檛 change that much,鈥� he said.

Looking elsewhere?

However, Bose does not dismiss the possibility of some investors looking at Southeast Asia, as well as India, which has become 鈥渕uch more competitive鈥� concerning venture capital, he said.

While emerging growth companies between $500 million and $1 billion in value will remain attractive to venture investors when compared to some of their larger competitors due to their high-revenue growth trajectory and limited impact on China鈥檚 鈥淢ade in China鈥� 2025 plan鈥攁n initiative to technologically upgrade manufacturing facilities鈥攊nvestors also will look elsewhere for those same types of companies, Bernstein added.

鈥淚nvestors are searching far and wide for these opportunities, many of which can be found in Southeast Asia鈥攖he next frontier,鈥� Bernstein said.

When all is said and done, those who invest in China believe access to the U.S. and its capital will trump all despite the new spat of regulations.

鈥淎t the end of the day, China will want access to the global equity markets,鈥� said the unnamed venture investor, who added that the current uncertainty around regulations may hang over investors for six to 18 months, but it is unlikely to have a lasting impact on the second-biggest venture market in the world.

鈥淚 don鈥檛 think this is a heart attack,鈥� said the investor. 鈥淚t鈥檚 more of a bad cold.鈥�

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