According to CB Insights there are 361 Unicorns in the world. A recent report in Strategy + Business reveals China has about 200 startups less than 10 years old and have valuations of 1B or more. 70% of them are preparing to go global.
Barring a top few we have not heard of most these Chinese companies. According to the Greater China Unicorn Index from research firm Hurun, there are 200 of them in China and 21 entered the club in Q1 2019. A 2018 PwC study backs up the extent and speed at which this phenomena is unveiling. Sample this:
“Examples … include ManBang Group, a pioneer in truck hailing; Meicai, a B2B platform for the agricultural industry; ByteDance, the developer of the content platform Toutiao and the popular 15-second video app TikTok; Yitu, which provides artificial intelligence (AI) services to business; Tuhu, which connects people to car-related services online; and the online brokerage Tiger Brokers ….83 percent said revenues had increased by more than 50 percent in the previous fiscal year; more than half of that group said revenues had more than doubled.”
The article & related reports are worth a read.
Some Highlights from Hurun’s report :
1. The top three on the list of unicorns are still Ant Financial with a $1 trillion+ valuation, ByteDance with a $500 billion+ valuation, and Didi with a $300 billion+ valuation.
2. Among the newly discovered unicorns, the largest number are from artificial intelligence and logistics industries.
3. The largest amount of unicorns and future unicorns come from the internet service industry, reaching 42 and 16 respectively.
4. Hong Kong Stock Exchange and Nasdaq witnessed the most listings of China’s unicorns in the first quarter of this year. Five unicorns listed successfully and withdrew from the list. They are: Maoyan Entertainment (HK:01896), Futu Securities (NASDAQ: FHL), CStone Pharmaceuticals (HK:01896), Tiger Brokers (NASDAQ:TIGR), and Weimob (HK:2013).
5. More than one-third of the listed potential unicorns have received investment from internet giants such as Alibaba, Tencent, and Xiaomi. Sequoia invested in 53 Unicorns, while Tencent and IDG did in 31 and 25, respectively.
This is a revelation and a marked difference in approach vis a vis companies from other than US and UK. US and UK markets have been enmeshed for a long time. But rest of the world the valuation came from investors who came in and benchmarked value and derived exit through buyouts. Flipkart of India is a case in point. Walmart needed a strategy to flank Amazon and Flipkart provided that platform at a price of $17B. Now apparently the real value is in Flipkart phone payment app. But I digress.
Where I learnt it #217
China’s herd of unicorns https://www.strategy-business.com/article/Chinas-herd-of-unicorns?gko=5a81d&utm_campaign=ChinaUnicornsPwCLinkedIn&utm_medium=social&utm_source=LinkedIn
Hurun Released “Greater China Unicorn Index” and “Future Unicorns” for 2019 Q1 https://pandaily.com/hurun-released-greater-china-unicorn-index-and-future-unicorns-for-2019-q1/
