KUNGFU Bear had its day.
Wang Run founded the startup in Beijing just over a year ago to let people order inexpensive massages through a smartphone app. As venture capital (VC) money flooded into China, the company raised cash to draw customers and acquire rivals. Its valuation topped US$15 million.
Now, the good times are over for Kungfu Bear and many of China's once-hot startups. After pouring more than US$30 billion into the country this year, venture firms switched off the easy money, concerned that there is too much competition and too many copycat products. A shakeout is beginning, particularly among app makers offering generic services such as car washes and massages. Co-founder...