- After the 2018 crypto crash, up to 90 percent of blockchain-focused Chinese venture capital firms left the market.
- Now, as China’s central government pushes for greater blockchain adoption, some are returning and deal-flow is increasing.
- Surviving funds are retooling and diversifying into fields such as secondary trading and bitcoin mining.
Chinese venture capital firms are taking another look at blockchain. After the 2018 crypto crash, up to 90 percent of blockchain-focused VCs left the market. Now, as China’s central government pushes for greater blockchain adoption, some are returning.
During the first six months in 2019, Chinese blockchain startups raised $368 million via 71 funding deals, according to Chinese financial data tracker 01Caijing.
VCs are finding it easier to raise money. Hong Kong-based Kenetic, which started in 2016 with a few partners trading their own capital, is on track to close an eight-figure fund next month, said managing partner Jehan Chu. NEO Global Capital, a fund backed by the NEO crypto project, has also been raising a second fund of about $50 million since June.
It is among numerous funds that are raising new vehicles this year because of a renewed sense of optimism. At the same time, VCs firms are diversifying away from equity plays in startups towards areas such as secondary trading and bitcoin mining.
These include Sora Ventures, an early-stage blockchain investment firm that entered the secondary market trading earlier this year. Its trading activities include swap, futures of mostly mainstream cryptocurrencies, which takes up about 20 percent of its asset-under-management, said founder and managing partner Jason Fang.