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Saints in good shape to build on success – Darbon Marguerite Gail Cole – Worship Service 12.06.2024 11:00 a.m.

Beijing has fallen three places to 8th place in the latest ranking of the world’s top 40 startup ecosystems compared to 2022, as a weak domestic economy and growing tensions with Washington dampen investment interest in China’s capital.

According to the latest Global Start-up Ecosystem Ranking (GSER) by research firm Startup Genome, Silicon Valley came in first place, while New York and London shared second place.

Singapore ranked seventh this year, making it the highest-ranked Asian city, with Seoul and Tokyo coming in ninth and tenth, respectively.

The GSER report evaluates startup hubs on five criteria: funding, performance, market reach, talent and experience, and knowledge. While Beijing received almost full marks in the last four categories, it scored the lowest among the top 10 cities in the funding category.

The Chinese capital, which reached its highest overall ranking of third in 2019, suffered mainly from a decline in financing deals and successful exits, according to the report. In the 30 months leading up to the end of 2023, the city recorded 223 Series A deals, ranking 11th globally, while it recorded just 60 exits, ranking 58th.

The Chinese government’s years-long crackdown on the technology sector has drawn investment away from China’s consumer internet sector, which was once fertile ground for unicorns – startups valued at over $1 billion. The escalating rivalry between the world’s two largest economies has also weighed on sentiment, investors and industry experts say.

Some US-based limited partners, particularly pension funds, have reduced their capital allocations in China, according to a blog post published in March last year by investment consultancy Preqin by Conrad Chan, a partner in Deloitte’s venture capital and private equity program in China.

In the first quarter of this year, venture capital investments in China increased fell by 30 percent compared to the previous quarter, the lowest in four years, according to an April KPMG report.

Despite the challenges, Beijing continues to lead Asian cities in ecosystem value, measured by the value of exits and start-up valuations from the second half of 2021 to the end of 2023, according to the GSER report.

At $525 billion, the ecosystem value of China’s tech hub was nearly five times that of Singapore and ten times that of Tokyo. During this period, Beijing saw 16 exits each valued at at least $1 billion, second only to Silicon Valley worldwide.

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