China overtakes the US in number of new companies worth at least US$1 billion, report says

  • China has 181 start-ups worth at least US$1 billion, outpacing the US with 138, according to the Hurun Report
  • Luckin Coffee, founded in June 2017, is the youngest of the successful new ventures to join the club of unlisted companies worth US$1 billion
Topic | Start-ups

Yujing Liu



A customer uses Alipay, the online and mobile payment platform operated by Ant Financial, to pay for goods at a pharmacy in Hong Kong. The company is among China’s tech “unicorns”. Photo: Xinhua

China’s sprawling network of start-ups worth at least US$1 billion expanded to 181 in the third quarter, overtaking the United States as home to greatest number of successful new ventures, according to Shanghai-based Hurun Report said on Friday.

The world’s second-largest economy has added 34 “unicorns”, or start-ups worth at least US$1 billion, in the third quarter, the publisher said in a release on Friday.

The start-ups are worth a combined 4.8 trillion yuan (US$696 billion), and the valuation of its biggest unicorn, Ant Financial, has exceeded its counterparts in the US – Uber and Airbnb, the report said.

“China has already surpassed the US to become the country with the most unicorns,” said chairman and chief researcher of the Hurun report, Rupert Hoogewer, in a statement.

“These unicorns, mostly in the new economy, are the fastest-growing companies with the most potential to grow big against a slowing economy.”

At the heart of China’s techno-nationalism is a hit list of 200 unicorns

While the report does not provide an up-to-date figure of the amount of US-based unicorns, August data by CB Insights and PitchBook shows the tally could be somewhere between 133 and 138.

China’s vast number of start-ups in industries spanning from e-commerce to fintech and artificial intelligence has transformed the way Chinese people eat, shop and entertain over the past decade, riding on a flood of enthusiastic early investment capital from within China and abroad.

A total of 20 Chinese unicorns went public during the first three quarters of this year, while another three merged with other companies, according to the report. Once listed, companies can no longer be considered a unicorn.

The only thing mythical about unicorns these days is their valuation

Ant Financial, the fintech firm operating China’s largest online payment platform, topped the start-up ranking with a 1 trillion yuan valuation.

In comparison, Uber’s latest valuation stood at US$76 billion in August, while Airbnb closed the latest round of funding last year valued at US$31 billion.

Jinri Toutiao, a popular news aggregation app owned by Beijing Bytedance Technology, came second with a valuation of 500 billion yuan.

Beijing rolls out the red carpet to woo unicorns to list in Shenzhen or Shanghai

Didi Chuxing, the country’s largest ride-hailing app, troubled by two recent cases involving the rape and murder of female passengers, was valued at 300 billion yuan (US$43 billion).

The report indicates 15 start-ups have achieved unicorn status within three years of their founding. The youngest among them is Luckin Coffee, a Beijing-based coffee chain founded just last year to take on Starbucks. It has since expanded to over 1,000 stores across 13 Chinese cities, boosting it valuation to 7 billion yuan.

Who has the most unicorns – China or the US?

Forty-five start-ups are from the internet services industry, which covers anything from car-hailing apps to travel platforms.

The second largest industry is internet finance, which is populated by 21 unicorns. E-commerce, with 20 billion-dollar start-ups, ranked third.

The Hurun Report is best known for its annual rankings of China’s richest people.

Ant Financial in an affiliate of Alibaba Group Holding, the New York-listed parent of the South China Morning Post.

China technology
Yujing Liu is a business reporter with a passion for understanding and explaining the fascinating complexities of China’s economy and society. Originally from Beijing, she joined the Post in 2017 after graduating from the University of Hong Kong with a degree in politics and journalism.
Related Articles