The number of unicorn companies in China has reached 369, and more than 60% of them are related to hard technology tracks such as AI and chips

Titanium Media APP

2024-04-29 13:52Posted on the official account of Jiangxi Titanium Media APP

The number of unicorn companies in China has reached 369, and more than 60% of them are related to hard technology tracks such as AI and chips

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China wants the "valuations" of tech companies to grow rapidly.

Titanium Media App learned that the new "China Unicorn Enterprise Development Report (2024)" was released at the 2024 Zhongguancun Forum "Global Unicorn Enterprise Conference" held on April 28.

According to the report, as of March 2024, there are 369 unicorn companies in China, and 67 new unicorn companies have become unicorns in the past year or so, with a total valuation of about US$1,404.45 billion, close to the total market value of companies listed on the Growth Enterprise Market (10.47 trillion yuan) as of the end of the first quarter of this year, and equivalent to 1.8 times the total market value of companies listed on the Science and Technology Innovation Board (5.56 trillion yuan).

Among them, there are a total of 231 unicorn companies in the "hard technology" track such as AI, quantum technology, and intelligent manufacturing, accounting for more than 6% (62.6%) of the total number of unicorns, and there are 52 unicorn companies in the field of AI alone, of which 13 are new enterprises. In addition, in terms of geography, unicorn companies cover 47 cities across the country, "Beijing, Shanghai, Shenzhen, Guangzhou, and Hangzhou" gather more than 60%, Beijing ranks first in the country and third in the world with 114 companies, and the total valuation of Beijing unicorn enterprises is 522.77 billion US dollars.

Zhang Yulei, deputy director of the Beijing Municipal Science and Technology Commission and Zhongguancun Management Committee, said that Beijing's unicorn enterprises are generally characterized by a large number, hard quality, new tracks, and high international level. 60% of Beijing's unicorn enterprises are hard technology enterprises, and one-third of the country's hard technology unicorns were born in Beijing.

Zhang Yulei said that in the next step, Beijing will focus on the goal of "new quality productivity", and strive to do a good job in changing strategic ideas, promoting the accelerated growth of enterprises, strengthening the main position of "unicorn" pilot innovation, and strengthening the financing services for unicorn enterprises, and actively build a long-term ecology to support the growth of "unicorn" enterprises.

When communicating with Titanium Media App earlier, Mi Lei, founding partner of Zhongke Chuangxing, said that the core of future technology investment is still to do "venture capital", and the "ecology" of scientific and technological innovation needs more capital support. In the future, China should establish an "infrastructure for scientific and technological innovation" to make enterprises more capable. The core of Chinese investment is to have "patience", to continue to support hard technology, capital must use "long cycle" in exchange for "big returns".

There are 114 unicorn companies in Beijing, ranking first in the country in terms of number and valuation

The so-called "unicorn" companies, generally referred to as unlisted start-ups with a valuation of $1 billion or more, were created by venture capitalist Aileen Lee in 2013 and have since become one of the important scale indicators of global enterprise development.

According to CB Insights, there are currently 1,229 unicorns in the world, covering 53 countries and regions, with a total value of $3.8 trillion.

Today's "unicorn" indicator in the report also includes companies that are less than 10 years old, often with disruptive business models or cutting-edge technologies or products, able to maintain rapid growth in the market, and likely to become industry giants.

According to the report, at present, there are 369 unicorn companies in China, and 67 new unicorn companies have been added in the past year or so. The total valuation of the company is about US$1.4 trillion, which is close to the total market value of companies listed on the ChiNext Board and equivalent to 1.8 times the total market value of companies listed on the Science and Technology Innovation Board.

At the same time, the number of these unicorns is more than a quarter of the number of unicorns in the world, second only to the United States. The average valuation of enterprises is US$3.81 billion, with 19 super unicorns valued at more than US$10 billion, and the average valuation of new unicorns is US$2.14 billion.

It is worth mentioning that super unicorns contribute nearly half of the valuation with a volume of 5.1%.

In terms of the specific valuation distribution range, there are 207 unicorn companies with a valuation between US$1 billion and US$2 billion, accounting for 56.1%, with a total valuation of about US$272.05 billion, accounting for 19.4%, and 19 super unicorn companies with a valuation of more than US$10 billion (inclusive), accounting for 45% of the valuation, accounting for 5.1%, with a total of about US$631.58 billion.

The report was jointly released by the Zhongguancun Unicorn Enterprise Development Alliance, KPMG Consulting (China) Co., Ltd., Great Wall Strategic Consulting, Beijing Fangdi Economic Development Research Institute, and China Science and Technology Policy Research Center of Tsinghua University, and the top 30 Chinese unicorn investment institutions (2024) were released at the conference.

From the perspective of hard technology, the report shows that there are 231 "hard technology" unicorns on the list, accounting for 62.6% of the total number of unicorn companies, and 86.6% of the new unicorns are "hard technology" unicorns. Unicorn companies in the cutting-edge emerging fields such as large models, quantum technology, aerospace technology, synthetic biology, brain-like intelligence, and green and low-carbon have shown explosive growth.

Due to the continuous improvement of the technical threshold of cutting-edge emerging tracks, the "expert" entrepreneurship of many universities and institutes represented by the Chinese Academy of Sciences and Tsinghua University has played an important role in the source incubation of hard-core technology unicorn enterprises. The Chinese Academy of Sciences has transformed and incubated 11 unicorn companies in the fields of aerospace, quantum technology, and artificial intelligence, while Tsinghua University has invested and incubated 5 unicorn companies in the fields of artificial intelligence, new materials, intelligent manufacturing, and medicine and health.

In terms of overall distribution, 369 unicorn companies are distributed in 16 fields, with the number of artificial intelligence and integrated circuits leading the way. In terms of quantity, the number of enterprises in the five fields of artificial intelligence, integrated circuits, medicine and health, new consumption, software and information services ranked the top five, with 52, 45, 39, 37 and 35 respectively, accounting for 56.4% in total. In terms of valuation, the average valuation of unicorns in the fields of artificial intelligence, fintech, and e-commerce ranks among the top three, with US$6.76 billion, US$6.57 billion, and US$6.19 billion, respectively.

There are 67 new unicorn companies distributed in 12 fields, with strong hard technology attributes. Among them, the number of enterprises in the fields of new energy, artificial intelligence, and integrated circuits is 13, 13, and 11 respectively; There are 9 intelligent manufacturing enterprises, 5 pharmaceutical and health enterprises, and 3 or less enterprises in other fields.

In addition, the report shows that 78% of the top 100 unicorn companies in terms of valuation have a strong correlation with the digital economy, and more than half of the start-up unicorn companies in the digital economy field cover B-end services such as industrial Internet, big data, AI healthcare, and enterprise services.

In addition, from a geographical perspective, Beijing, which has more than 110 unicorn companies, has become an important breeding ground and gathering place for global unicorn companies.

According to the report, there are 114 unicorn companies in Beijing, including 25 new ones, with a total valuation of US$522.77 billion and an average valuation of US$4.59 billion. It ranks first in the country in terms of volume and valuation.

At the same time, Beijing has also cultivated a number of listed unicorn companies such as Xiaomi, JD.com, and Meituan, with a total of more than 40 companies with a total market value of 3 trillion yuan. Today, more than one-third of the country's new unicorns were born in Beijing.

Beijing's unicorn enterprises are widely distributed, with a layout in 15 fields, ranking first in 12 fields in the country, and more than 15 unicorn enterprises in the three fields of artificial intelligence, software and information services, and new consumption, accounting for about 50% of the country's industry.

It is worth mentioning that unicorns in Beijing's cutting-edge technology field have performed outstandingly. Among the 5 general AI large model unicorn companies in the country, Beijing accounts for 4, and the four new unicorns are Zhipu Huazhang (Zhipu AI), the dark side of the moon, Baichuan Intelligence, and Zero One Everything.

In addition, Beijing's commercial aerospace unicorns lead the country, accounting for 5 of the country's 9 commercial aerospace unicorn enterprises, including Galaxy Aerospace and Blue Arrow Aerospace.

In fact, Beijing has announced a number of support policies for "unicorn" companies.

In September 2023, 11 departments, including the Beijing Municipal Science and Technology Commission and the Zhongguancun Science and Technology Park Management Committee, issued a notice on "Several Measures to Further Cultivate and Serve Unicorn Enterprises", launching a set of support measures for active discovery, systematic cultivation, precise policy implementation, and standardized development in response to the urgent demands of unicorn enterprises in terms of talents, markets, and innovation.

According to the British Nature Index Scientific Research Cities Report, Beijing has ranked first in the world for seven consecutive years, and the 2023 Global Scientists List shows that the number of high-ranking scientists in Beijing has reached 471, ranking first among global innovation cities.

Zhang Yulei said that Beijing has built a "4+X" service system for unicorn enterprises, that is, four "exclusive" services, including special class mechanism, special policies, full-time housekeepers and professional capital, as well as Beijing's unique and diversified innovation ecology and entrepreneurial culture, and will continue to strengthen the cultivation of unicorn enterprises in the future.

"We sincerely invite unicorns from all over the world to invest and develop in Beijing, and we will provide a superior business environment and innovative resource elements, and Beijing will work together to build a 'unicorn city'. Zhang Yulei said at the end of her speech.

Seventy percent of "unicorns" come from foreign capital, and the "internationalization" of enterprises has become a new trend

According to the report, more than 70% of China's unicorn companies have received fund investment with an international background, and nearly half of the core teams of the enterprises have overseas backgrounds.

This means that while renminbi funds are beginning to emerge, Chinese companies still need the support of overseas capital and want to "globalize".

On April 26, at the Zhongguancun Forum "Hard Technology Investment and Development Forum", Zhongguancun International Holdings Co., Ltd. announced that it would sign a cooperation framework agreement with Greenstone Capital and London Oxford Group, and the three parties will jointly carry out investment service cooperation, attract a total scale of 1 billion US dollars of science and technology innovation funds, invest in science and technology enterprises in Greater China, and promote the construction of three science and technology accelerators in Dubai, Riyadh and London to help Chinese technology companies expand the Middle East and North Africa market.

After the meeting, Lu Jiang, general manager of Zhongguancun International Holdings Co., Ltd., told Titanium Media App that the fund is mainly positioned to invest in high-growth technology enterprises with mature development and overseas needs. This cooperation will introduce capital water to Zhongguancun to build a world-leading science and technology park, and provide assistance for high-level service for Zhongguancun's opening up to the outside world and high-quality promotion of Beijing's "two zones".

"In the future, the actual size of the fund will be adjusted according to the project and financing situation. With the continuous development and growth of China's economic strength, more and more Chinese enterprises have the strength and ability to 'go global', and the demand for 'going out' is increasing, which also brings more opportunities for institutions like Zhongguancun International that are committed to providing cross-border innovation services for global enterprises. Lu Jiang said that the fund will focus on biomedicine, information technology, high-end manufacturing and other fields, and at the same time, Zhongguancun International will also actively serve the overseas listing and financing needs of science and technology enterprises to help the international development of enterprises.

On April 28, Zhang Ying, founding managing partner of Matrix Partners Partners, said that entrepreneurs need stable and huge market opportunities, and if you consider the perspective of security, no country can be much better than China, so the next China can only be "China".

However, at present, VC fundraising and exit are facing huge challenges. Zhang Ying said frankly that everyone should not invest blindly. If you don't choose to shift the battlefield based on China, no matter which track, you will not be able to reach the height of the Chinese market, and the possibility of other markets is zero.

Zhang Ying also talked about the cash-out incident of Yang Zhilin, the founder of the dark side of the moon.

He bluntly said that this is not a very excessive thing, why can investors live a very comfortable life without very big risks, but to carry the founder to the "cliff run" every day, must achieve scale and listing, he can account for his wealth. This is illogical and inhumane.

Zhang Ying emphasized that investors should have more patience, more tolerance and empathy. "The investor community is a long march, and any goal you want to achieve will actually have to invest longer and longer. So in this case, if we don't have real love and persistence outside of work, I think it's hard to persevere. ”

Li Dahai, founder and CEO of Facewall Intelligence, said at the meeting that the AI large model industry has ushered in the stage of scenario application, of course, there is a certain gap between China and the United States compared with the best AI technology, especially at the data level, and I hope the government can give more support. "We're thinking about how to take all the good data that the world has to use, and stuff it into a model that's small enough to get a good intelligence, which is a particularly important direction. ”

Wu Shichun, founding partner of Meihua Venture Capital, said that he is very optimistic about the development of AI applications, new energy industry chain and commercial aerospace track. In his view, the soul of investment is "exit", so he hopes that China will be able to establish an effective capital exit mechanism in the future, so that enterprises can exit through overseas IPOs.

(This article was first published on Titanium Media App, author | Lin Zhijia, editor | Hu Runfeng)

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