India will eclipse China as the world’s most populous country by mid-2023, the United Nations estimated on Wednesday. The South Asian nation is expected to have a population of 1.4286 billion by the middle of this year, surpassing China by 2.9 million people.
Venture funding to the two Asian countries, however, runs counter to their population trends, Crunchbase data shows. In the past year, venture capital spending in India has fallen much more precipitously when compared to China, which garners more than twice as much VC spending as its neighbor.
VC funding falls across Asia
Amid a broader global venture funding pullback, VC dollars invested in India-based startups plummeted 75%, to just $2.4 billion, in Q1 2023 compared to the first quarter of 2022, Crunchbase data shows. That’s down from $9.8 billion in Q1 2022 and down nearly 25% from $3.2 billion in Q4.
Venture funding to China-based startups also fell, though far less drastically: down 38% quarter over quarter and year over year to $8.1 billion in Q1 2023.
Total venture funding to Asia fell 33% quarter over quarter and 57% year over year to $15.2 billion in Q1 2023 — the lowest amount in at least the past three years, Crunchbase data shows.
That coincides with a 53% YoY first-quarter drop in global venture funding.
India’s population grows as China shrinks
China’s population fell for the first time in six decades last year as its fertility rate dropped. American lawmakers are also seeking to curtail U.S. investment in China’s technology sector, citing national security concerns, which would further dampen an economy that has struggled through population stagnation and strict COVID lockdown measures.
In contrast, India’s population has grown at an average rate of 1.2% for the past 12 years, according to government data reviewed by Reuters, and large American companies such as Apple are expanding their manufacturing there rather than in China.
India also has one of the youngest populations among large nations, with an estimated 254 million people between the ages of 15 and 24. That means its economy will have to expand greatly to provide jobs and wealth to its people and could usher in more investment for its burgeoning technology sector.
https://news.crunchbase.com/venture/india-china-population-startup-funding/
