How China's VCs view the stock market crash

The consensus among China's VCs is that the crash isn't likely to directly affect start-up funding but sky-high valuations and easy money will cease, reports Tech in Asia

Though China’s market crashed hard on Monday, the pain has eased slightly. The full repercussions of the market dive may not be known for some time. But how is all this going to affect China’s start-up scene? 
 

William Bao Bean (left) & Cyril Ebersweiler. Image via Tech in Asia

William Bao Bean and Cyril Ebersweiler, SOSV

“Fundamentally, I don’t think there’s a huge change that happened,” said SOSV partner and Chinaccelerator managing director William Bao Bean. “The market was overbought and now it’s selling off; it’s a natural correction.”
 

William says that he doesn’t see the market crash as directly affecting start-ups. But he does think things are going to change. “I’ve been telling our companies since the beginning of the year that in the second half it’s probably going to be a bit tougher to raise [funds],” he told Tech in Asia. 
 

Cyril Ebersweiler, founder of Haxlr8r, said the market downturn “will simply correct the extreme behaviours of the last year in terms of financing and valuations.”
 

Rui Ma. Image via Tech in Asia

Rui Ma, 500 Start-ups

500 Start-ups China partner Rui Ma also sees winter on the horizon for China’s tech start-ups. But like William Bao Bean, she doesn’t see that as being the result of the A-shares crash. “I believe the domestic Chinese market is set up for a valuation correction in the pre-A stage, but this isn’t going to come as much from loss of capital as it will be from just the fact that normal attrition rates of start-ups will start hitting the early stage investment community – and they have started to already,” she told Tech in Asia.
 

Image via Twitter (@hanstung)

Hans Tung, GGV Capital

GGV Capital managing partner Hans Tung said that although the market is clearly volatile, GGV is “still bullish on the online economy.” There’s no doubt that the offline economy has hit a rough patch, and Hans sees that as likely to continue, thanks to the fact that mobile and online services are disrupting a lot of China’s traditional industries. 
 

This is an excerpt from Tech in Asia. You can read the full article here.