China Emerges as Home to 369 Unicorns, Valued at an Average of US$3.8 Billion
China is now home to 369 unicorns, valued at an average of US$3.8 billion. AI and semiconductor sectors dominate the unicorn landscape in China. Beijing leads the pack with the highest number of unicorns, followed by Shanghai and Shenzhen.
China has solidified its position as a hub for innovation and technology, with a staggering 369 unicorns - start-ups valued at over US$1 billion - calling the country home. According to a recent report jointly published by KPMG, the Zhongguancun Unicorn Company Development Alliance, and the Great Wall Enterprise Institute, more than a quarter of these unicorns are involved in China's artificial intelligence (AI) and semiconductor sectors.
These Chinese unicorns boast an impressive average valuation of US$3.8 billion, making them a force to be reckoned with in the global tech landscape. The report, released at the Zhongguancun Forum in Beijing, revealed that AI unicorns are the highest valued, with an average valuation of US$6.76 billion, closely followed by financial technology firms at US$6.57 billion. The AI and semiconductor sectors accounted for 14.1% and 12.2% of the total number of unicorns, respectively.
While China's unicorn ecosystem continues to flourish, it still trails behind the United States in terms of overall numbers. Last year, the US boasted over 700 unicorns, compared to China's 340. However, it's important to note that the report did not cover Chinese firms' counterparts in the US.
The report also shed light on the geographical distribution of unicorns within China. Beijing emerged as the unicorn capital, minting the highest number at 114, followed by Shanghai with 63, and Shenzhen, a technology hub in southern Guangdong province, with 32.
The growth in unicorn numbers in China reflects the challenging IPO landscape in Hong Kong, Shanghai, and Shenzhen, where many companies have delayed their listing plans. The recent cancellation of Alibaba Group Holding's Cainiao Smart Logistics Network listing, along with other setbacks, has contributed to the gloomy state of initial public offerings in the region.
Chinese big tech companies have played a significant role in nurturing unicorns, with 25 of them being incubated by industry giants such as Tencent Holdings, Alibaba, and Baidu. Moreover, more than 70% of Chinese unicorns have received investment from funds with an international background, highlighting the global interest in China's tech scene.
Venture capital firms have been instrumental in funding Chinese unicorns, with established players like HongShan (formerly Sequoia Capital China), Citic Capital, and Tencent leading the way. HongShan alone has invested in 96 of the 369 unicorns, while Citic Capital and Tencent have funded 74 and 56 firms, respectively.
However, the escalating geopolitical tensions between the US and China could pose challenges for future fundraising efforts of Chinese start-ups. The US government has implemented restrictions on American investment in sensitive technologies in China, including semiconductors and AI, which could impact the growth and development of Chinese unicorns.
China is now home to 369 unicorns, valued at an average of US$3.8 billion.
AI and semiconductor sectors dominate the unicorn landscape in China.
Beijing leads the pack with the highest number of unicorns, followed by Shanghai and Shenzhen.
Source: SCMP