Startup fundraising in Greater China notched a fifth consecutive quarter of growth in Q2 2026, crossing $26.7 billion—the highest level in over six years. The momentum pushed startup financing in the first half of the year to $46.8 billion, already eclipsing the $46.3 billion raised across all of 2025.
Fundraising in the June quarter by startups in mainland China, Hong Kong, Macau, and Taiwan officially overtook the previous market peaks seen around late 2020-21, when the quarterly fundraising averaged about $22.2 billion.
With the completion of 708 deals, the June quarter’s deal volume was slightly behind Q1, but the dealmaking momentum sustained amid a wavelike rise from quarter to quarter since the start of 2025, according to DealStreetAsia DATA VANTAGE’s latest report, Greater China Deal Review: Q2 2026.
In H1, deal activity expanded moderately, with the half-year deal volume reaching 1,422, an 18.8% increase compared to 1,197 deals in H1 2025.
Deal value reaches the highest level in over six years
Deal value, meanwhile, demonstrated explosive growth. Fuelled by artificial intelligence (AI) adoption, macro policy support, and a favourable listing window, Q2’s deal value surged 33.4% over a strong Q1. Comparing H1 2026 to a year ago, deal value rose by a phenomenal 129.7%.
In a year-over-year (YoY) comparison, deal value in the latest quarter was nearly 2.5 times the level recorded in Q2 2025, while deal volume also increased substantially by 24.2%.
“The Chinese economy has gone through basically all sorts of stress tests that you can imagine, from the trade war and COVID-19 to policy reset and US sanctions,” said Kent Chen, Neuberger Berman’s managing director and head of Asia private equity (PE). “From a valuation point of view, this is still an attractive moment to look at China.”
The appealing valuation level is combined with new growth engines emerging from the country’s tech sectors, like advanced manufacturing, green tech, AI, and robotics, said Chen.
AI, Embodied Intelligence propel megadeal financing
The global AI supercycle is accelerating across Greater China. Market enthusiasm in AI, particularly the development of large language models (LLMs), as well as embodied intelligence, propelled yet another surge in megadeal financing—defined as investments of $100 million or more.
Building upon a robust Q1, the overall megadeal financing soared 53.4% to almost $19.3 billion, marking the highest quarterly figure in over six years. The number of megadeals also expanded 4.9% quarter-over-quarter (QoQ) to 64, approaching historical peaks last observed in Q1 and Q3 of 2021, when 65 and 69 megadeals were recorded, respectively.
The megadeals accounted for 72% of Q2’s fundraising total.
Megadeals accounted for 72% of Q2’s fundraising total.
Notably, megadeal financing in AI (including LLMs) and Embodied Intelligence, an AI subset focused on systems with physical bodies, such as humanoid robots and quadruped robots, reached new heights in the quarter. The two verticals together absorbed just under 60% of all megadeal funding.
Deep-pocketed investors continued to favour deeptech industries as well, with other megadeals of Q2 seen across Electric/Hybrid Vehicles, HealthTech, Space Tech, Low-Altitude Economy, and Biotech.
64 megadeals rake in $19.3b, or 72% of Q2’s capital
While AI and Embodied Intelligence dominated the megadeal landscape, broader fundraising efforts in both areas also bore fruit.
As the two best-funded sectors in Q2, 162 AI deals of all sizes collectively secured over $8.6 billion in the quarter, while Embodied Intelligence recorded nearly $5.6 billion in combined financing across 124 deals.
More significantly, AI fundraising demonstrated exponential growth from 2025 through mid-2026. Overall AI funding in the first six months of 2026 reached about $12.7 billion, outperforming H1 2025 by 11.3x and already representing a 3.6x increase compared to last year’s total.
AI, Embodied Intelligence emerge as Q2’s best-funded verticals
While public market enthusiasm over AI has practically driven up private market valuations in every tech sector in China, especially across AI, LLMs, and embodied robotics, Sinovation Ventures’ managing partner Richard Yang expects a reality check, noting that public markets “will correct for sure” amid a shift towards fundamental business validation from a scarcity-driven trading hype.
Reforms fuel A- and H-share IPOs, but US IPOs at near-stagnation
Despite a slow start, IPO activity by Greater China-based companies proved resilient in 2026, showing positive signs of exiting its multi-year downturn.
Following a dip in Q1, the number of IPOs by Greater China issuers across global stock exchanges bounced back to 74 in Q2, up 29.8% from the previous quarter. Their total IPO proceeds also increased 28.5% to almost $11.4 billion, according to Dealogic data analysed by DealStreetAsia.
IPO activity by Greater China issuers back in growth mode
This momentum reflected the cumulative impact of massive investor demand for deeptech assets like AI and semiconductors, strategic policy backing from Beijing, expanding offshore liquidity, as well as continued listing reforms across exchanges in both mainland China and Hong Kong to favour innovative companies.
The Main Board of the Hong Kong Exchange remained the primary listing venue for Greater China companies, while IPO activity across the overall A-share market in mainland China—which includes exchanges in Shanghai, Shenzhen, and Beijing—also accelerated.
In contrast, IPO activity for Greater China-based companies in the US remained severely constrained. Only DSC Holdings Ltd, a provider of AI application infrastructure for China’s used-car industry, completed a Nasdaq listing this year on June 26, raising about $51 million. This followed a free fall in such listing activity per quarter throughout 2025.
The Greater China Deal Review: Q2 2026 report has extensive data on:
- Quarterly and half-year startup fundraising trends
- Top startup funding deals
- Most favoured industries by investors
- Top 10 investors
- Top IPOs by Greater China firms in H1 2026
- Insights from Greater China-focused private market participants
The report is available exclusively to DealStreetAsia–DATA VANTAGE subscribers. Subscribe/upgrade your subscription now to access our entire set of reports.
