As of March 2018, there are 126 unicorn companies in China across 15 industries and 10 cities, with a total valuation of $625.3 billion, or about four trillion yuan.
The definition of unicorn is a company with a valuation of more than $1 billion USD in less than 10 years. (A Chinese unicorn needs to be registered in China.)
On April 8, Zeping Ren, Yuan Gan and Jiaqi Xie from Evergrande Research Institute issued the “China Unicorn Report”, an analysis of China’s unicorns and their reasons for shifting growth overseas. The report also interpreted recent changes in relevant policies and the impact on the stock market, as well as opportunities and risks.
During this year’s “Two Sessions”, China’s biggest political meetings of the year, regulatory authorities expressed their enthusiasm towards the new economy, and stated that they would accelerate unicorn listing and detailed research on their return to China. The word “unicorn” has swept the market and has become the most heated topic of discussion.
A number of agencies have previously compiled lists of unicorns in China. In December 2017, the Hurun Research Institute released the “Hurun Greater China Unicorn Index 2017”, which counted 120 unicorns in China with a total valuation of more than $456 billion (about three trillion yuan). Last month, the Greatwall Enterprise Institute and the Torch High Technology Industry Development Center of the Ministry of Science and Technology jointly released a list of 164 unicorns valued at $628.4 billion (about 3.9 trillion yuan) in 2017.
Evergrande Research Institute’s report listed 126 unicorns in China across 15 industries and 10 cities, with a total valuation of $625.3 billion, or about four trillion yuan.
The report analyzed the worldwide distribution and industry shares of unicorns. Unicorns in the U.S. and China account for more than 70 percent of the global distribution. According to CB Insight, from 2013 to March 2018, there are 237 unicorns worldwide. Among them, 118 unicorns (49.78 percent) are from the U.S. 62 unicorns (26.16 percent) are from China. 13 unicorns are from Britain, and nine unicorns are from India, which rank third and fourth, respectively, in terms of countries with the most unicorns. In terms of valuation, the top three industries are fintech, e-commerce and software services, accounting for about 45 percent of the overall valuation. Global crowdfunding and venture capital contributed significantly to the rapid growth of these companies, which are mainly distributed in three major fields: high-end manufacturing, internet and technology.
According to the report, unicorns can be divided into platform-driven and technology-driven types. The platform-driven ones establish online platforms with no direct contact with the real economy. It is similar to a third party that build bridges between companies and consumers. “Platform-driven” companies adopt an online time-dependent model, featuring “familiarity”, “recognition” and “realization”, and connects marketing, operations and finances through IT. Technology-driven companies take high tech as the main driving force, such as big data, cloud computing, artificial intelligence and blockchain. Typically, companies fall into the category of high-tech manufacturing.
According to the report, Chinese unicorns have shorter growth cycles, stronger innovation capacity and more concentrated emergence compared with unicorns in other countries. The rapid emergence of Chinese unicorn companies underscores China’s improved innovative strengths, pioneering new forms of industrial development and promoting upstream and downstream industries and even cross-industrial development. “Hard technology-driven” has become a typical feature of Chinese unicorns. Investors have also shifted their preferences from traditional to high-tech companies.
The report also states that over 80 percent of China’s unicorns are localized in four big cities, Beijing, Shanghai, Shenzhen and Hangzhou. Beijing is home to 58 unicorn companies with a total valuation of $336.1 billion. 65 percent of unicorn companies in Beijing are localized in “cultural fields”, including big data and artificial intelligence. 50 percent of unicorn companies in Shanghai are internet-based, such as YIGUO, Xiaohongshu and ele.me. 45 percent of unicorn companies in Shenzhen are technology-driven. Hangzhou’s 14 unicorn companies focus on e-commerce and internet finance, most of which revolve around Alibaba‘s ecosphere.
The report also mentions the interesting relationship between unicorns and BAT giants (Baidu, Alibaba and Tencent). Roughly 50 percent of China’s unicorn companies are related to BAT. Among them, 27 are associated with Alibaba, 37 are associated with Tencent, and 16 are associated with Baidu. The three unicorn companies, Ele.me., Didi Chuxing and Qichebang, are associated with all three giants. In terms of valuation, a total of 11 “super-unicorn” companies with valuations greater than $10 billion are associated with BAT, except for DJI. Therefore, the higher the company’s valuation, the more likely it is associated with BAT.
Attached: the list of unicorns released by the Evergrande Research Institute（Valuation over 5 billion dollars）