COLDSKY.CN – More than half of the 124 Chinese unicorns recorded in 2017 had direct or indirect investment from BAT, the collective term for China’s three largest Internet companies – Baidu, Alibaba and Tencent, said a report by business information service provider Itjuzi.com.
Itzuji.com, with its focus on a structured database for China enterprise, stated in its unicorn startups report (in Chinese) the capital market has generally become more rational despite ‘crazy’ funding for the sectors of the sharing economy, new retail and AI.
The 124 unicorns, private companies valued at $1 billion or more, had a total estimated value of $615.5 billion or 4.964 billion on average. Compared with the last list, 43 companies were newcomers and 15 previous unicorns had disappeared as a result of going public, acquisitions or lower appraisals, according to the report.
A look at the relationship of investors revealed BAT played roles in 50.8 percent of the 124 unicorns, and more surprisingly ten of eleven decacorns, startups valued at more than $10 billion. DJI, a Shenzhen-based manufacturer of unmanned aerial vehicles, is the only company to keep a distance from the three Internet giants.
At top of the list are smartphone maker Xiaomi, Alibaba’s payments company Ant Financial, and ride-hailing giant Didi Chuxing, all valued at more than $50 billion. Itzuji.com lowered the value of Xiaomi, which is now tapping financial institutes for a proposed IPO.
The second-tier startups, valued at between $10-50 billion, are led by on-demand services provider Meituan Dianping, which raised $4 billion in a funding round last September and was valued at $30 billion, news aggregator Toutiao, valued at more than $20 billion, and insurance giant Pingan Group’s online financial firm Lu.com. Cainiao.com, the logistics arm of Chinese e-commerce giant Alibaba, batteries producer CATL, Tencent-backed live-video streaming website Kuaishou, DJI and JD Finance, a unit of China’s No.2 e-commerce firm JD.com, also made this category.
Eleven of the 12 startups valued from $5 billion to $10 billion had BAT investment behind them, notably Tencent’s support to online banking affiliate WeBank, bicycle-sharing firm Mobike, humanoid robot maker Ubtech Robotics, and electric vehicle developers WM Motor and Nio. Alibaba also invested in WeBank, local-services platform Koubei, and Mobike’s rival Ofo. Only one of the 12 companies, Shanghai United Imaging Healthcare (UIH), seems to stand outside BAT influences and receives funds mainly from investors with state-owned assets.
Some 74 companies, approximately 60 percent of those on the list, were valued at around $1-2 billion.
What sectors are the unicorns in? The pie chart shows 15 percent of the startups, 18 companies, are from the cultural and entertainment industry, followed by 14 percent in e-commerce amid China’s upgrading consumption, and 12 percent in auto and mobility. Didi Chuxing raised $9.5 billion in two rounds of funding in the last year.
In terms of location, 46 percent of the 124 companies or 57 companies are based in Beijing, a rise from 42 percent in 2016, followed by 22 percent in Shanghai and 14 percent in Guangdong.
According to the report’s ten most active venture capital, Sequoia Capital China invested in 32 companies to take top spot, followed by IDG with investment in 24 startups and Qiming Venture Partners with investment in 18.
Itjuzi.com said the fund raising will only intensify this year and more unicorns are expected to gain investment from the BAT, while Xiaomi and next-generation tech giants TMD (Toutiao, Meituan Dianping and Didi Chuxing) are also actively expanding their business reach through investment.
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