Internet infrastructure operators like Didi must now prove their political legitimacy to the government, Ma Changbo, an online media startup founder, wrote on his WeChat social media account. .
“This is the second half of the separation between the US and China,” he wrote. “In capital markets, the two-way fence model is coming to an end.”
Didi, Ms. Liu and Mr. Liu did not immediately respond to requests for comment.
China’s internet companies have benefited from the best of two worlds since the 1990s. Many have received venture capital from abroad – Alibaba, the e-commerce giant, is funded by Yahoo and SoftBank, while Tencent, another internet giant, is backed by South Africa’s Naspers. They also copied their business models from Silicon Valley companies.
Chinese companies have gained further advantage as Beijing has blocked most of the major US internet companies from its domestic market, giving homegrown companies plenty of room to grow. Many Chinese Internet companies then listed their shares in New York, where investors wanted more innovative and adventurous startups than in Shanghai or Hong Kong. So far this year, more than 35 Chinese companies have listed shares in the United States.
Now, the Didi crackdown is changing the calculus of many in the Chinese tech industry. An entrepreneur who has set a New York listing target for her enterprise software startup says it will be harder to list in Hong Kong at a high valuation because of what her company has done. – software as a service – is a relatively new idea in China.
A venture capitalist in Beijing added that due to China’s data security requirements, startups in the field of artificial intelligence and software as a service will now not consider it. public launch in New York. Few are willing to speak up for fear of retaliation by Beijing.
At the same time, the United States has become more hostile to Chinese technology companies and investors. Some investors say, as Washington ramps up scrutiny of deals involving sensitive technology, it’s nearly impossible for Chinese venture capital firms to invest in Silicon Valley startups.