Chinese clean energy firms dominate top 10 VC deals globally amid tough market: Preqin

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Five China deals raised US$2.93 billion in the first half of 2024, two-thirds of the total from the world’s top 10 clean energy deals

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A drone photo taken on June 6, 2024, shows a low-carbon industrial park in Sheyang, Yancheng, east China’s Jiangsu Province. Photo: Xinhua

Eric Ng

Published: 4:45pm, 26 Jun 2024

China accounted for five of the top 10 venture-capital deals involving clean energy – and two-thirds of such deals by value – in the first half of 2024, according to Preqin.

The five China deals primarily involved companies in the supply chain for battery-powered and hybrid vehicles, according to Preqin, which provides data on private capital and hedge funds.

Together, these deals raised US$2.93 billion from private investors – mainly domestic institutions – in the year’s first six months, or 65 per cent of the US$4.5 billion raised by the top 10 deals involving low-carbon energy globally.

China’s dominance in the first half builds on a trend. In 2022, the aggregate volume of clean energy deals in China reached US$12 billion, surpassing the US at US$11.6 billion. In 2023, China’s deal volume for clean energy increased 22 per cent to almost US$15 billion – more than double the US total of US$7 billion – with a third coming in the electric vehicle (EV) sector.

In addition to clean energy, artificial intelligence (AI) and semiconductors were the sectors where unlisted companies in China drew the most funds from investors in the first six months, Preqin said in a report on Wednesday, adding that the Chinese government intends to grow and support these industries.

“Of these mega deals, AI was a driving force, with volume by May this year reaching almost US$6 billion – around half of 2023’s full-year total [for AI deals] of US$12 billion,” the report said.

This is despite substantial weakness in overall China deal volume, which fell 42 per cent quarter on quarter to US$12 billion in the first three months of this year, much steeper than the global decline of 12 per cent in the same period.