Will the decline of Venture Capital in China increase demand for domain names?

For those who know me, you know that I read the Wall Street Journal every day, have for years – moved from the paper version to the digital version a few years ago. I’m possibly one of the only people who reads the Journal and watches Cheddar eSports news updates every day, but hey – that’s me!

Okay – now back to the topic of this post, the decline of Venture Capital activity in Japan. Today there was an interesting article in the Journal about the end of China’s Venture Capital Boom. In it, they shared some interesting data on the decline in both number of funds and money raised by funds in China, here’s a high-level look at the numbers:

Source – Preqin

The article goes on to talk about how VC firms in China didn’t turn out to be the golden ticket to riches so many people had hoped they would be. As a result, the startup ecosystem is shrinking, funding is declining, and well, talk of China becoming the next Silicon Valley has been put on hold.

Of course, as a domain investor this got me thinking. If people who were looking to get a higher than normal return are moving their money out of startups in China, this could mean domain names could come back in style.

For anyone who has been following the domain market in China you know that it peaked a few years ago and then dropped, and well, it hasn’t ever recovered. I’m wondering if 2020 could be the year we see a shift as funds move away from startups and venture capital in China and into alternative assets.

What do you think? Am I onto something here or am I way off? I want to hear from you, comment and let your voice be heard!

{ 5 comments… add one }

  • Snoopy November 14, 2019, 8:21 pm

    Umm no…. that would lower domain values.

    Reply
  • Bobby November 14, 2019, 8:33 pm

    I like your thought process.
    Capital migration from China into us based assets and dot coms is a good thing.

    The Chinese govt has put the squeeze on Bitcoin so maybe Domains is the answer to move money secretly under the nose of their govt.

    Digital Assets

    https://www.armstrongeconomics.com/world-news/cryptocurrency/chine-moving-to-create-a-digital-currency/

    Reply
    • Snoopy November 14, 2019, 8:56 pm

      I think it is very hard for anyone is China to buy domains due to capital controls. A lot of deals never get paid for with Chinese buyers.

      To say China didn’t turn out like Silicon Valley is an understatement. This is a communist country with a shocking record, one that isn’t getting much better.

      Reply
  • David November 14, 2019, 8:37 pm

    Less startups would seem to indicate less Chinese “end-user” demand on the horizon.

    IMO it is a longshot to suggest a possible increased interest in domain names as an alternative asset class to venture capital invest.

    But who knows?

    Reply
  • Mark Thorpe November 15, 2019, 6:18 am

    Chinese VC firms are what started the domain boom in China. So less domain demand going forward IMO, other than end-users and Individual Investors.

    Reply

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