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Coronavirus pandemic
Tech

Funding for Asian start-ups likely to slow amid coronavirus outbreak, if Sars and Zika any guide

  • In 2003 and 2004, funding for Asian private companies declined by 27 per cent and 29 per cent respectively against 2002 levels
  • The current coronavirus outbreak has not yet shown signs of slowing down, in terms of new infections

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Medical officers spray Indonesian nationals with antiseptic after they arrived from Wuhan, China centre of the coronavirus epidemic. Photo: Reuters
Coco Fengin Beijing

Financing for private companies in Asia is likely to slow amid the outbreak of the deadly coronavirus but could bounce back afterwards, according to a CB Insights report, which draws on how the 2003 Sars and 2016 Zika epidemics impacted markets in their respective regions.

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It may add to an already cooling venture capital landscape in China amid the economic slowdown and the US-China trade war. In 2019, the amount of funding raised by Chinese startups fell 44 per cent from the year before to a total value of only US$54 billion, according to investment database CVSource.

The coronavirus, which originated in China in December, has officially infected 17,386 people and claimed 362 lives worldwide as of Monday morning. The World Health Organisation declared a global health emergency over the situation on Friday.

In 2003 and 2004, funding for Asian private companies declined by 27 per cent and 29 per cent respectively against the level in 2002, according to CB Insights.

But both deal volume and funding started to recover in the third quarter of 2004, soon after the WHO announced China free of new cases in May that year.

And in 2005, funding for Asian start-ups hit a record in the third quarter, helped by Yahoo's US$1 billion investment in Alibaba, then a private company and now the biggest e-commerce company in China and owner of the South China Morning Post.
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