China held its position as the world’s second-largest base for unicorns, or private firms valued at above $1 billion, trailing the US, according to the latest report published on Tuesday by Chinese wealth research firm Hurun.
Per the Global Unicorn Index 2023, China accounted for a total of 316 unicorns, or 23% of the 1,361 unicorns recorded across the globe as of December 31, 2022. The unicorn count signifies a 50% growth since the pre-COVID times when the country saw 206 firms earning the moniker.
The world’s second-largest economy saw a new batch of 15 firms entering the $1-billion club. Although China is home to more unicorns than 15 countries combined, it lagged behind the US, which is home to 666 unicorns, or 49% of the total.
The two unicorn powerhouses — the US and China — accounted for 72% of the world’s unicorns; while India ranked third with 68 unicorns, per the report.
“Last year was a year of two halves, with unicorns growing fast in the first half of the year, but then slowing down dramatically as the US raised interest rates together with global headwinds and uncertainties, with the result that investors all but stopped funding new projects. The collapse of Silicon Valley Bank in March this year further depressed valuations,” said Rupert Hoogewerf, Hurun Report’s chairman and chief researcher.
Top 10 Countries with the highest number of unicorns
| Country | No. of Unicorns (YoY Change) | Since pre-Covid | |
|---|---|---|---|
| 1- | USA | 666 (+179) | 463 |
| 2- | China | 316 (+15) | 110 |
| 3- | India | 68 (+14) | 47 |
| 4- | UK | 49 (+10) | 36 |
| 5- | Germany | 36 (+10) | 29 |
| 6↑ | Israel | 24 (+7) | 17 |
| 6- | France | 24 (+5) | 20 |
| 8- | Canada | 23 (+8) | 23 |
| 9↑ | South Korea | 18 (+8) | 12 |
| 10↓ | Brazil | 17 (+5) | 13 |
ByteDance – Most valuable unicorn
TikTok parent ByteDance topped the list to become the most valuable unicorn for the second year in a row, with a valuation of $200 billion. Despite a huge following overseas, the firm’s access to users’ data remains a concern. The tech juggernaut saw a 30% growth in revenue to surpass $80 billion in 2022, from $60 billion in 2021, Bloomberg reported.
Meanwhile, Ant Group ranked third after the US-based SpaceX. The Hangzhou-based firm, which spun out of Alibaba in 2014, was the most valuable unicorn in the world at the time — until 2021 when ByteDance overtook its leading position after Ant Group’s failed IPO.
Ant Group’s online lending arm was green-lit by the regulators to boost its registered capital by 10.5 billion yuan ($1.2 billion), which signalled a shift in the year-long government-driven overhaul.
Chinese fashion retailer Shein was the fourth most valuable unicorn, which went up 12 places within a year, with a valuation of $65 billion. Most recently, the Guangzhou-based firm was reported to raise $2 billion in a new funding round in March this year, as well as a US IPO in the second half of 2023, per a Reuters report.
Shein joined Elon Musk’s SpaceX; and OpenAI, the owner of ChatGPT, to become the best-performing unicorn — these startups added $45 billion, $37 billion, and $17 billion in valuation respectively.
Chinese smartphone makers Oppo and Vivo are among some of the new unicorns in China that have risen to be included in the Hurun Unicorn Index; while firms like ride-hailing giant Didi became a unicorn again after turning private following its lacklustre US IPO.
Global Unicorn Index 2023: Top 10 unicorns by valuation
| Rank (YoY Change) | Rank Change (Pre-Covid) | Unicorn | Valuation (US$bn) | Valuation Change US$bn (YoY) | Valuation Change (Pre-Covid) (US$bn) | Country | Sector |
| 1 (same) | 1 | ByteDance | 200 | -150 | 125 | China | Social Media |
| 2 (+1) | 6 | SpaceX | 137 | 37 | 102 | USA | Aerospace |
| 3 (-1) | -2 | Ant Group | 120 | -30 | -30 | China | FinTech |
| 4 (+12) | 220 | Shein | 65 | 45 | 63.5 | China | E-commerce |
| 5 (-1) | 5 | Stripe | 50 | -45 | 27 | USA | FinTech |
| 6 (+5) | 5 | WeBank | 33 | 3 | 13 | China | FinTech |
| 7 (+1) | 77 | Databricks | 31 | -7 | 28 | USA | Big Data |
| 8* (New) | New | Telegram | 30 | New | New | UAE | Social Media |
| 9 (+1) | 129 | Revolut | 28 | -5 | 26 | UK | FinTech |
| 10 (-1) | 2 | Cainiao | 27 | -7 | 8 | China | Logistics |
Fintech rules
With 171 unicorns, the fintech sector generated the highest number of unicorns, followed by software-as-a-service (SaaS), e-commerce, and artificial intelligence (AI). Around 20% of the unicorns are payment-related firms. Ant Group, US-based payments processor Stripe, and Chinese virtual bank WeBank are the top three most valuable firms in the fintech space.
SaaS was the second industry with the highest number of unicorns at 136 followed by e-commerce at 120.
The industries with the most unicorns
| Rank | Industry | No. of Unicorns (YoY Change) | % of Total Value |
|---|---|---|---|
| 1 (0) | FinTech | 171 (+32) | 0.17 |
| 2 (0) | SaaS | 136 (+2) | 0.1 |
| 3 (0) | E-commerce | 120 (-2) | 0.085 |
| 4 (0) | Artificial Intelligence | 105 (+21) | 0.062 |
| 5 (0) | Health Tech | 92 (+12) | 0.045 |
| 6 (0) | Cyber Security | 62 (+22) | 0.035 |
| 7 (+1) | Blockchain | 53 (+23) | 0.048 |
| 8* | Enterprise Services | 45 (+27) | 0.021 |
| 9 (-2) | Biotech | 42 (+11) | 0.019 |
| 9* | Logistics | 42 (+23) | 0.03 |
Top unicorn backer
Sequoia Capital China, founded in 2005 by investment guru Neil Shen, topped the list having backed 112 unicorns in 2022, six firms more than the previous year. Hong Kong-listed investment bank China International Capital Corporation (CICC) ranked second, investing in a total of 76 unicorns, 46 more than the previous year, per the report.
Top 30 most successful investors in China Unicorns
| Rank (Change) | Investor | No. of China Unicorns | YoY Change |
|---|---|---|---|
| 1- | Sequoia China | 112 | 16 |
| 2 (+3) | CICC | 76 | 46 |
| 3 (+1) | Tencent | 53 | 12 |
| 4 (-1) | IDG Capital | 51 | 1 |
| 5 (-3) | Hillhouse Capital | 47 | -5 |
| 6* | CITIC | 40 | New |
| 7- | Matrix Partners China | 36 | 12 |
| 8 (+4) | Alibaba | 29 | 11 |
| 9 (-3) | Qiming Venture Capital | 28 | 3 |
| 9 (-1) | YF Capital | 28 | 6 |
| 11 (-2) | GGV Capital | 26 | 6 |
| 12* | CPE Investment | 25 | New |
| 12* | SCGC | 25 | New |
| 14- | 5Y Capital | 24 | 7 |
| 14 (+9) | Temasek | 24 | 17 |
| 16 (+7) | Legend Capital | 22 | 15 |
| 16* | CCB International | 22 | New |
| 16 (+13) | Eastern Bell Capital | 22 | 16 |
| 16* | Qianhai FOF | 22 | New |
| 20* | BOC | 21 | New |
| 21 (-12) | Shunwei Capital | 20 | 0 |
| 23* | China Growth Capital | 20 | New |
| 23* | Gaorong Capital | 19 | New |
| 23* | GF FUND | 19 | New |
| 25 (-14) | SoftBank | 18 | 9 |
| 25 (-2) | Xiaomi | 18 | 11 |
| 25 (-10) | CDH | 18 | 3 |
| 25* | Oriza | 18 | New |
| 25 (-13) | Zhen Fund | 18 | 0 |
| 30* | Lenovo | 17 | New |
| 30* | Skycus China Fund | 17 | New |
| Source: Hurun Research Institute * New to index |