Startup funding in Greater China grows 13% in Q2 on Ximalaya's $2.4b deal

Funding for Greater China startups rose 13.1% in the second quarter of 2025 on the back of Tencent Music’s whopping $2.4-billion acquisition of online audio platform Ximalaya. Whether this momentum will sustain in the next few quarters amid persistent macro headwinds remains to be seen.

Startups headquartered in mainland China, Hong Kong, Taiwan, and Macau completed 570 deals worth a total of $10.8 billion in the April-June period. The overall funding increased 13.1% from Q1 2025, although the deal volume declined 9.1%, according to DealStreetAsia—DATA VANTAGE’s latest report, Greater China Deal Review: Q2 2025.

On a year-on-year (YoY) basis, Q2 2025 fared better with a 19.4% increase in deal value and an 8.6% uptick in deal count.

Q2 startup funding grows a notch from Q1

Overall, the first six months of 2025 booked 1,197 startup investments, up 5% from the same period in 2024. H1’s funding total stood south of $20.4 billion, down 30.1% YoY.

Business support services tops industry ranking

China-focused fund managers have entered an era where artificial intelligence (AI) has become as ubiquitous as mobile Internet once was, with AI-based business support services becoming a highly sought-after sector for dealmaking.

With the completion of 95 deals, business support services stood out as the top industry in Q2, followed by semiconductor and medical devices, which recorded 93 deals and 49 deals in the quarter, respectively.

Business Support Services leads Q2 deal count

Investors demonstrated strong interest in writing big cheques for AI-enabled business support services startups, particularly those developing embodied intelligence and robotics solutions.

This has given rise to a few big-ticket fundraisers in the space, including embodied AI startup Galbot, which raised $153 million from Chinese battery giant CATL in June. Consumer robotics firm Aiper closed $137 million in a strategic financing in April, with Spain’s Fluidra alone investing $100 million in the deal. Flexiv Robotics, which builds adaptive robots for the manufacturing industry, achieved unicorn status at a valuation of over $1 billion after raising its Series B+ round at almost $100 million.

Greater China IPOs grow across all major exchanges in H1

Greater China companies showed renewed interest in getting listed in H1, after a few years of lacklustre IPO activity due to post-pandemic risk-off sentiment and stuttering economic growth.

H1 booked 94 Greater China IPOs across exchanges in mainland China, Hong Kong, and the US, with just under $8.7 billion in IPO proceeds. This marks a 19% increase in the number of IPOs and a 38.3% surge in the overall IPO funds raised in comparison to H1 2024, according to Dealogic data analysed by DealStreetAsia.

Greater China IPOs recover slowly amid tightened scrutiny, macro headwinds

IPOs in mainland China dominated. Despite continuing regulatory scrutiny over IPO candidates, the A-share market showed signs of renewed vitality in H1 after a slow Q1. The number of A-share IPOs, which refer to IPOs across mainland Chinese exchanges in Shanghai, Shenzhen, and now the Beijing Stock Exchange, grew 20% YoY to 48 in H1. Their overall A-share IPO proceeds jumped 30.1% YoY to exceed $5.2 billion.

In Hong Kong, 28 IPOs by Greater China companies on the city’s Main Board collectively amassed almost $2.8 billion in H1. These IPOs, alongside a flurry of secondary listings by mainland China-traded companies, contributed to an overwhelming capital-raising momentum that is expected to set Hong Kong on track to becoming the world’s top listing destination this year.

In the US, ongoing tech rivalry and tumultuous trade relations between the world’s two biggest economies have major fluctuations in the IPO activity of Greater China companies on American exchanges. But H1 had a fair number of IPOs, with 18 Greater China companies pulling off their first-time public share sales in the US and raising a total of $676.8 million. Compared with H1 2024, the number of IPOs grew 80% and the total IPO proceeds increased 19.1%.