The latest Hurun Report from China on Friday revealed the number of Chinese startups worth $1 billion has overtaken the number of US startups worth the same amount.
China has added 34 “unicorns” in Q3 of 2018, taking China’s total to 181 compared to 138 in the US, according to the South China Morning Post. The country’s 181 thriving new enterprises are worth a combined 4.8 trillion yuan, the equivalent to $696 billion.
Rupert Hoogewer, chief researcher of the Hurun report said of China’s startups:
“These unicorns, mostly in the new economy, are the fastest-growing companies with the most potential to grow big against a slowing economy.”
Despite this, China’s overall growth is slowing, Q3 saw its slowest quarterly growth as a country since the economic crisis which began a decade ago. Its stock markets have also tumbled with the Shenzhen and Shanghai declining over 25% this year alone.
Many of these “unicorn” companies in the US and China are technology startups, with China’s new companies innovating in anything from fintech to e-commerce and artificial intelligence.
China’s determined technology focus has been rewarded with much early investment capital sourced both nationally and internationally. More specifically, 45 of China’s unicorns are internet services related businesses and 21 are in internet finance.
That said, China’s peer-to-peer lending business, much of it internet based, is under severe regulatory pressure and has declined rapidly over the last 12 months.
15 of China’s billion-dollar startups surpassed their $1-billion thresholds within three years of their creation.
The latest Hurun list doesn’t include the 20 Chinese companies that have become publicly listed already and 2018, and three which had merged.
China’s Biggest Unicorns
China’s largest unicorn is, no surprise, Ant Financial an affiliate to Alibaba and the world’s most valuable unicorn with a valuation surpassing $150 billion and 1 trillion yuan. Alibaba and Ant Financial founder Jack Ma, at 54, is China’s richest man with a net worth of $39 billion.
Ma founded Ant Financial, which rebranded from Alipay in 2014. In 2017 Ant Financial handled more payments than Mastercard and its online payments platform completed more than $8 trillion worth of transactions.
It controls the world’s largest money-market fund, has made loans to tens of millions of people and is now the world’s biggest fintech firm.
The second-largest Chinese startup is Jinri Toutiao, a news aggregation application owned by Bytedance Technology and with a value of over $75 billion or around 500 billion Chinese yuan.
The US figure of 138 billion-dollar startups is taken from CB Insights and Pitchbook data from August 2018. A recent analysis of 91 U.S unicorns found over half had been founded by modern-day American immigrants.
Uber is the most valuable U.S unicorn at $72 billion, followed by Elon Musk’s Tesla at $21 billion. If Uber decides to go public it could achieve an IPO valuation of $120 billion.
Featured image from Alibaba.