China News is reporting that cooling private equity and venture capital deals are causing challenges for investors. Ni Zhengdong, head of Zero2IPO – a research group, stated;
“Chinese venture capital and private equity investors made investments too quickly in the past three years and the startups they invested in used up their money and failed to finish the next round of financing.”
Ni stated that popular sectors like “online to offline, peer-to-peer lending and smart hardware were cooling down because many companies in these sectors died.”
The same article pointed to data from Wangdaizhijia, a firm that tracks the internet finance industry, that said 99 online lending platforms either shut down or experienced problems during the month of August. China is the largest online lending market in the world with thousands of platforms in operation. Only recently has the China government enacted stricter rules for online lending causing many platforms to scurry for solutions. Just last week in a different report, Chinese officials launched a probe “two crippled peer to peer lending platforms”.