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Startups

Tencent restructuring prompts fears for China's startup funding

Half of Chinese unicorns in for rough ride if tech giants curtail investment

Tencent is one of five Chinese tech companies that provide a combined 49% of startup funding in the country. (Photo by Yu Nakamura)

TOKYO -- Concerns are growing about funding for Chinese startups as Tencent Holdings -- by far the biggest source of capital for these companies -- moves to tackle falling profits with a shift from maturing consumer markets to servicing businesses.

The operator of the WeChat social media network announced this weekend its first restructuring in six years, consolidating content businesses and creating a new division to provide services for corporate clients in areas such as cloud computing. The move comes after the group announced in August its first year-on-year quarterly profit drop in more than a decade. Tencent shares plummeted following a government crackdown on video games, the group's main revenue generator.

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