A glance at the world’s unicorns: China overtakes US for the first time

Photo by Liam Macleod on Unsplash

China has surpassed the United States for the first time to become home to the world’s largest number of unicorns – privately held startups valued at $1 billion or more – raising the stakes in an escalating trade war that has spilt over into the tech sector.

Of a global tally of 494 unicorns, 206 are Chinese and 203 are American, according to the inaugural Hurun Global Unicorn List 2019 released this week.

“China and the US dominate with over 80 per cent of the world’s known unicorns, despite representing only half of the world’s GDP and a quarter of the world’s population,” said Rupert Hoogewerf, chairman and chief researcher of Shanghai-based publishing group Hurun Report, in a statement.

“The rest of the world needs to wake up to creating an environment that allows unicorns to flourish,” said Hoogewerf.

Table 1: Top countries and cities where the world’s unicorns are based

RankingCountryNumber of Unicorns RankingCityNumber of Unicorns
1China2061Beijing82
2USA2032San Francisco55
3India213Shanghai47
4UK134New York25
5Germany75Hangzhou19
5Israel76Shenzhen18
7South Korea67Nanjing12
8Indonesia48Palo Alto10
8France49Bengaluru9
8Brazil49Redwood City9
11Switzerland39London9
12Sweden212Guangzhou8
12Japan212Boston8
12Singapore214Gurgaon7
15Spain 115Mountain View6
15Australia116Sunnyvale5
15Colombia116Seoul 5
15Ireland118Sao Paulo4
15Finland118Jakarta4
15Argentina118San Diego 4
15Malta118Atlanta4
15Philippines118Santa Monica4
15Estonia118Paris4
15Luxembourg118Berlin4
18Chengdu4
18Hong Kong4
18Chicago4

Source: Hurun Research Institute

Trade friction between China and the US has spiralled into a technology battle, with Washington blacklisting Chinese technology companies such as smartphone maker Huawei, and most recently, video surveillance supplier Hikvision, over alleged human rights violations in China’s Xinjiang province.

At the same time, the Chinese market is witnessing a plunge in startup investments at home amid rising investor caution and growing concerns over inflated startup valuations. Venture capital deals in China plummeted 77 per cent to $9.4 billion in the second quarter of 2019 compared to the same period in 2018, while the number of deals roughly halved to 692, according to market research firm Preqin.

It is also noteworthy that the ranking counts many more Chinese unicorns than other research companies, including CB Insights which recorded 99 unicorns in China in October 2019, and an earlier 2017 report from Deloitte and China Venture, which indicated that China had 98 unicorns, just behind the US (106).

China is the world’s largest unicorn hub

The top three startups on the list are all based in China. They are digital payments giant Ant Financial, which was spun out of Alibaba in 2011 and is valued at $150 billion; Bytedance, the parent company of news and information platform Jinri Toutiao and viral short video app TikTok, valued at about $75 billion; and ride-hailing giant Didi Chuxing, valued at over $50 billion.

Among cities, Beijing was ranked as the world’s unicorn capital with 82 such companies, comfortably ahead of San Francisco (55), followed by Shanghai (47), New York (25) and Hangzhou (19). As a region, Silicon Valley leads the world with 102 unicorns.

Interestingly, twenty unicorns, or 4 per cent of the total number, were incubated by large companies before being spun off and attracting outside investors.

Table 2: Unicorns spun off from large corporations

Company NameSpun off fromCountryValuation (US$bn)Industry
Ant FinancialAlibabaChina150FinTech
Taobao DianyingAlibabaChina2E-commerce
AlisportsAlibabaChina1Media & Entertainment
LufaxPingAnChina38FinTech
Ping An Healthcare TechnologyPingAnChina9Health Tech
OneConnectPingAnChina7FinTech
JD DigitsJDChina19FinTech
JD LogisticsJDChina12Logistics 
JD HealthJDChina1.5Health Tech
Suning FinanceSuningChina7FinTech
Suning SportsSuningChina2Media & Entertainment
NetEase MusicNeteaseChina1.5Media & Entertainment
YoudaoNeteaseChina1Software and Services
BeikeLianjiaChina9Real Estate Tech
Uber ATG UberUSA7Shared Economy
Du Xiaoman FinancialBaiduChina3FinTech
WhaleyCMCChina1.5Consumer Goods
ShuhaiHaidilaoChina1.5Logistics
RRSHaierChina1.5Logistics 
Kingsoft CloudKingsoftChina1.5Cloud 
Daojia58China1Software and Services
Nikola Motor Company NikolaUSA1E-Cars

Source: Hurun Research Institute

Chinese companies took the lead in the spin-off trend. Alibaba Group, insurer Ping An and e-commerce major JD.com have each nurtured three unicorns, followed by retailer Suning (2) and internet giant NetEase (2).

“Chinese companies are far and away the most successful at spinning off unicorns, with 18 of the world’s 20 ‘spun-off’ unicorns,” said Hoogewerf.

E-commerce produced 33 unicorns in the country – the largest number of unicorns – followed by fintech (22). Media & entertainment came third with 17 unicorns, while logistics ranked fourth with 16. Artificial intelligence (AI), a buzzword in the Chinese market in recent years, recorded 15 unicorns.

Due to China’s large market size, the cumulative valuation of its fintech unicorns stood at $262 billion, roughly four times the $71-billion valuation booked by 21 fintech unicorns in the US.

Sequoia incubates most unicorns

The 494 unicorns listed on the ranking are based in 24 countries around the world and have a combined valuation of $1.7 trillion.

About one in five unicorns was backed by Sequoia, which has invested in 92 such companies. Chinese internet giant Tencent, best known for its instant messaging app WeChat, came second with investments in 46 unicorns. It was followed by SoftBank Group (42), Tiger Fund (36) and IDG (31).

“Unicorns are supposed to be hard to find, but investors like Sequoia, SoftBank and Tencent make it look easy,” said Hoogwerf.

Table 3: Most successful investors into unicorns – Top 10

RankingInvestorNumber of Unicorns
1Sequoia92
2Tencent46
3SoftBank42
4Tiger Fund36
5IDG31
6Goldman Sachs24
7Alibaba22
8Andreessen Horowitz20
8DST20
10GGV19
10Qiming19

Source: Hurun Research Institute

An interesting difference between China and the United States is that Chinese technology majors, such as Tencent and Alibaba, are also some of the world’s biggest investors in startups. The likes of Amazon and Google, in contrast, barely made it to the top 100 investors list.

As China and the US took the lead, India came third in unicorn incubation with 21 unicorns, followed by the UK (13) and Germany (7).

Southeast Asia boasts a total of seven unicorns, according to the report. Indonesia had the largest number of unicorns in the region, including Tencent-backed ride-hailing service Gojek, Alibaba-backed online marketplace Tokopedia, Jakarta-based online travel agency Traveloka, and Ant Financial-backed e-commerce giant Bukalapak.

Singapore came second with ride-hailing firm Grab and Alibaba-owned e-commerce company Lazada, while Philippines recorded one unicorn, property technology major Revolution Precrafted.

Table 4: Asian unicorns – Top 50

Global RankingCompany NameValuation (US$bn)CountryIndustryFounderYear FoundedKey Investors
1Ant Financial150ChinaFinTechJing Xiandong2014Primavera, CIC,   Sequoia
2Bytedance75ChinaMedia &   EntertainmentZhang Yiming2012Sequoia, SIG, GGV Capital, Qiming
3Didi Chuxing55ChinaShared EconomyCheng Wei2012Tencent, Alibaba,   Sequoia, Matrix Partners China, GGV Capital
6Lufax38ChinaFinTechJi Kuisheng2011Morgan Stanley,   BOCGI, GTJA (Hong Kong)
11WeBank20ChinaFinTechGu Min2014Tencent, Warburg   Pincus, Temasek
12Cainiao19ChinaLogistics Tong Wenhong2013GIC, Temasek,   Primavera
12JD Digits19ChinaFinTechChen Shengqiang2013Sequoia, Harvest   Investments, China Taiping
14Kuaishou18ChinaMedia &   EntertainmentSu Hua2011Sequoia, Morningside, Baidu, Tencent
15DJI15ChinaRoboticsWang Tao2006Accel, Sequoia, Maison Capital
15Grab15SingaporeShared EconomyAnthony Tan, Tan   Hooi Ling2012Vertex Ventures, GGV Capital, SoftBank, Tiger Global, Didi Chuxing, HSBC, Emtek Group, Toyota Motor Corporation,   Hyundai Motor Company, Yamaha Motor, Tokyo Century, Central Group, Invesco, Microsoft, Booking Holdings
20Bitmain12ChinaBlockchainZhan Ketuan, Wu Jihan2013IDG Capital, Sequoia Capital China, Crimson Ventures, Sinovation Ventures
20JD Logistics12ChinaLogistics Wang Zhenhui2007Hillhouse, Sequoia,   Tencent
23Gojek10IndonesiaShared EconomyKevin   Aluwi, Michaelangelo Moran, Nadiem Makarim2010Openspace Ventures, KKR, Warburg Pincus, Tencent Holdings, Google, JD.com,   Astra International
23Paytm10IndiaFinTechVijay Shekhar Sharma2010Alibaba Group,   SoftBank, Berkshire Hathaway, Sapphire Ventures, Mountain Capital, Ant Financial
25Beike9ChinaReal Estate TechZuo Hui2018Tencent
25CARS9ChinaE-commerceYang Haoyong2011Sequoia, Capital   Today, IDG, Matrix Partners China
25Coupang9South KoreaE-commerceBom Kim2010SoftBank, Altos Ventures, Sequoia Capital, BlackRock, Maverick Ventures
25Ping An Healthcare   Technology9ChinaHealth TechGao Jing2016IDG, SBI, SoftBank
34Meicai7ChinaE-commerceLiu Chuanjun2014Shunwei, GGV Capital, ZhenFund
34OneConnect7ChinaFinTechYe Wangchun2015IDG, SBI
34Suning Finance7ChinaFinTechZhang Jindong2006Everbright, SCGC
34Tokopedia7IndonesiaE-commerceLeontinus Alpha   Edison, William Tanuwijaya2009Indonusa Dwitama, East Ventures, CyberAgent Capital, Beenos Partners, SoftBank
43BYJU’s6IndiaEdTechByju   Raveendran, Divya Gokulnath2008Aarin Capital,   Sequoia Capital India, Chan Zuckerberg Initiative, Sofina, Verlinvest,   Tencent Holdings, Naspers, General   Atlantic, Qatar Investment Authority
43Full Truck Alliance6ChinaLogistics Wang Gang2014Tencent, Sequoia,   Lightspeed China, Hillhouse, YF Capital, GGV Capital
43Ola Cabs6IndiaShared EconomyAnkit   Bhati, Bhavish Aggarwal2010Tiger Global, Hyundai, Kia Motors, Sequoia Capital India,   SoftBank Capital, DST Global, Baillie Gifford, Vanguard, Falcon Edge Capital,  Tekne Capital, Yes Bank,   Sachin Bansal, Temasek Holdings, China Eurasian Economic Cooperation Fund,   Eternal Yield International, Steadview Capital, Tencent Holdings, Sailing   Capital
43SenseTime6ChinaArtificial   IntelligenceXu Li2014CDH Investments, IDG, CICC
43UCAR 6ChinaShared EconomyLu Zhengyao2015YF Capital, CICC
43WeDoctor6ChinaHealth TechLiao Jieyuan2010Sequoia, Goldman Sachs, Tencent, Qiming, Hillhouse
50Bluehole5South KoreaVideo GamesChang Byung-gyu2007Tencent Holdings
50Lazada5SingaporeE-commerceAimone Ripa di   Meana, Alexander Samwer, Arthur Brejon de Lavergnee, Bede   Moore, Elizabeth Craft, Eugene Chistyakov, Fung   Lestario, Inanc Balci, James Chang, Maximilian   Bittner, Oliver Samwer, Stefan Bruun, Stein Jakob   Oeie, Sundeep Sahni2012Alibaba Group,   Temasek, Tesco, Rocket Internet
50OYO Rooms5IndiaShared EconomyRitesh Agarwal2013Greenoaks Capital, SoftBank, Huazhu Hotels Group, Grab, Didi   Chuxing, Airbnb
57Megvii4ChinaArtificial   IntelligenceYin Qi2011Sinovation Ventures, Qiming, Legend Star, CCB International, Ant Financial, GGV Capital
57New Dada4ChinaLogistics Kuai Jiaqi2014Sequoia, DST, JD
57Royole4ChinaConsumer GoodsLiu Zihong2012CITICPE, Co-Stone,   IDG
57Traveloka4IndonesiaE-commerceAlbert   Albert, Derianto Kusuma, Ferry Unardi2012East Ventures, Global Founders Capital, GIC, Expedia
57Ubtech4ChinaRoboticsZhou Jian2012Qiming, Iflytek, CDH   Investments, Tencent
57United Imaging4ChinaHealth TechXue Min2010China Life, SDIC
57WM Motor4ChinaE-CarsShen Hui2015Envision, Sequoia,   SIG
57Xpeng Motors4ChinaE-CarsHe Xiaopeng2014Morningside, IDG,   Matrix Partners China, Shunwei, Alibaba, GGV Capital
57Ziroom4ChinaReal Estate TechZuo Hui2011Warburg Pincus,   Sequoia, Tencent
57Zomato4IndiaLogistics Deepinder   Goyal, Pankaj Chaddah2008Info Edge, Sequoia Capital, Vy Capital, Temasek, Sequoia Capital India, Ant Financial,  Glade Brook Capital Partners, Delivery Hero
84Bona film3ChinaMedia &   EntertainmentYu Dong2003Sequoia, SIG, Matrix Partners China, Alibaba, Wanda, Tencent
84Canaan3ChinaBlockchainZhang Nangeng2013Jin Jiang Group,   Tunlan
84China UMS3ChinaFinTechTian Lin2002Everbright, IDG
84Cloudwalk3ChinaArtificial   IntelligenceZhou Xi2015Shunwei, Oriza,   Qianhai Xingwang
84Dadi Digital Cinema3ChinaMedia &   EntertainmentLiu Rong2006Alibaba Pictures
84Douyu3ChinaMedia &   EntertainmentChen Shaojie2014Sequoia, Tencent,   Nanshan Capital
84Du Xiaoman Financial3ChinaFinTechZhu Guang2018TPG, Carlyle,   Taikang, ABC International
84Hellobike3ChinaShared EconomyYang Lei2016GGV Capital, Grains Valley VC, Joy Capital, Ant Financial
84Henlius3ChinaLife SciencesLiu Shigao2009HG Capital

Source: Hurun Research Institute

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.