THE country’s hardware startups are getting more venture capital (VC) funding this year, helped by the country’s effort to drive investments in strategically important technology.

Venture capital firms pumped US$5.4 billion into hardware startups such as chip producers and robotics makers across the country during the first half of the year, according to a latest report by Seattle-based data provider PitchBook. That’s already surpassed the US$5.1 billion raised in total last year and is almost quadruple the US$1.4 billion total for 2016.

That’s likely to provide a boost to China’s efforts to drive spending and research in key industries like cutting-edge chipmaking. The country aims to achieve tech self-sufficiency in its latest five-year economic blueprint published earlier this year.

New initiatives in China’s 14th Five-Year Plan “aim to increase scientific and technical capabilities within areas such as renewable energy, quantum computing, biotechnology, and semiconductors,” PitchBook said in its report. “Investors with the network and capacity to invest in these companies in their earlier stages will reap great financial benefit as governments and economic development councils within the region look to boost capital deployment into these industries.”

Startups in China drew US$56 billion during the six months ended June, compared with 2020’s US$75 billion, the firm said.

Still, the year’s biggest venture deals — including ByteDance Ltd.’s US$5 billion round and a US$3 billion fundraising by grocery startup Xingsheng Selected — took place in the first quarter, the data showed.

In the first half, there were about 99 VC exits, compared with 216 deals last year, PitchBook said. (SD-Agencies)