A sneak peek into what China’s companies been up to

Since the winter of 2016, my team and I started building Silicon Valley Race (aka 硅兔赛跑), a specialized publication that writes about Silicon Valley and US-based tech in Chinese. Since then, we have observed the continuous growth of China’s interest and knowledge of the current events in Silicon Valley: there are more than a dozen media outlets that focus particularly on Silicon Valley; anyone can read about Silicon Valley news via the mainstream Chinese media sites.

This relationship between Silicon Valley and China, however, is lopsided — as US visibility into China’s tech ecosystem is opaque, at best. Motivated to fill Silicon Valley in on the recent news and updates of China’s startup scene, VC activities, “it” companies, and tech advancements, we’ve decided to launch “Tech in China.”

This article is based on our review of a report from Hurun Research Institute* titled Global Unicorn Companies in 2019. We selected the Chinese companies in this report. The goal of this article is to provide readers with general background information and status quo of the Chinese Unicorns, VCs, as well as the technology sector.

All of our articles, facts, references are based on local Chinese media reports.

Special thanks to Alice, Fannie, and Kevin for translation and data cleansing and analysis, Nono for editing, Kyle from Coatue, Jing (ex-Sierra), Tobias (Google), Lexie (Saucey) for advice and suggestions.

Overview of China’s unicorns

According to the Global Unicorn List 2019 released by the Hurun Research Institute, as of June 30, 2019, there are 494 unicorn companies in the world, spread around 118 cities in 24 countries. These companies were established on average about seven years ago, with an average value of 3.4 billion USD and a total value of 1.68 trillion USD.

For the first time, China has surpassed the United States to become the country with the most unicorn companies in the world (quantity-wise), with 206 unicorn companies, accounting for 42% of all unicorn enterprises in the world. The United States has 203 unicorn companies, accounting for 41% of the total. Together, China and the USA dominate with over 80% of the world’s known unicorns.

According to The Chairman and Chief Researcher of Hurun Report Mr. Hu, “ China has surpassed the United States in the number of unicorns and the new economy has brought brand new opportunities on a global scale. Thanks to the huge market of China, from e-commerce to cloud computing, to artificial intelligence and blockchain, any industry you scale has the potential to become a world leader.”

The top three unicorns by the end of 2019 in the world are all from China: Ant Financial, ByteDance, and Didi. In addition to these three companies, well-known Chinese companies such as DJI (drone company), Kuaishou (live streaming company) and Weizhong Bank (fintech company) are also on the list.

Below are Hurun’s top 10 global unicorns by estimated value in 2019:

In terms of industry, companies in e-commerce generated the most number of unicorns in China. The runner-up is Fintech, and the total valuation of companies in fintech sums up to 262 billion USD, which is at least four times that of the United States.

The following is the distribution of Chinese unicorns by industry:

The industries with the most unicorns in China are e-commerce, fintech, media entertainment, logistics, and artificial intelligence. (Data from Hurun report)

The “Hunters” behind Chinese unicorns

An interesting difference in investment between China and the U.S. is that China’s large tech companies, such as Tencent and Alibaba, are also among the world’s largest startup investment institutions. In contrast, large U.S. tech companies such as Amazon and Google are nowhere near being the top 100 investment institutions in the world.

The list shows that 20 (4%) global unicorn companies were incubated by large companies and are subsequently spun out to raise external capital. The most successful large companies in this regard are Alibaba, Ping An (one of the world’s largest insurers), and JD, each incubated three unicorn companies. Suning (an online retailer who bought department stores of Wanda) and Netease ranked second with two unicorns each.

Of these 20 unicorn companies hatched by large companies, 18 are from China. For example, Alipay, which used to be a financial solution under Alibaba, spun out and became Ant Financial.

In terms of the time needed to become a unicorn, five companies achieved $1 billion+ valuation within one year of establishment. Unsurprisingly, all five are from China. Among them, Ant Financial is the fastest company to become a unicorn and has the highest valuation today.

We have compiled the top ten investors (including corporate institutions) behind Chinese unicorns. Our results are as follows:

Sequoia China, since its establishment in 2005, has invested in more unicorns than any other funds or companies in China. Their portfolio companies include Alibaba, JD.com, 360, Meituan Dianping, Tencent Music, Gaode Map, Didi, Bona Film, BGI group, DJI, Wanda, VIPKID, WME IMG China, ZTO Express, eleme, Pinduoduo , Mobike, Douyu, Sina, iQiyi, Ant Financial, Hello Bike, etc. Sequoia’s portfolio companies have almost penetrated the development of the entire Chinese network, and the industry layout has been scattered to virtually every corner of the Chinese Internet ecosystem. Mr. Shen Nanpeng (Neil Shen) reached the top position to Midas list multiple times and has become a legend in China’s Internet and China VC world.

Established in 1992, IDG China has invested in 800+ companies worldwide with 180 exits. Some of the famous unicorn companies IDG China invested in include SenseTime, PingAn Healthcare, Royole, XPeng Motors, Kingsoft Cloud, Beibei etc. IDG China also has bold bets in now globally-renowned companies in entertainment, consumer product, and e-commerce such as Farfetch, Razer, Moncler, Gentle Monster, Legendary Film, Ten Fu’s Tea, Wish, Evisu, Heekcaa.

Jack Ma’s Alibaba and Pony Ma’s Tencent, as the A and T in China’s BAT, have become the two corporations with the most unicorns in China besides traditional VCs and funds. Tencent mainly invests in later stages and have invested in Didi, Kuaishou, JD Logistics, Beike, Full Truck Alliance, WeDoctor, Ubtech, Bona Film, Douyu, and other companies. Alibaba invested in XPeng Motors (has an office in Silicon Valley), and in combination with its layout in film and entertainment through Alibaba Pictures, Alibaba also invested in Bona Film and Dadi Film.

Qiming Capital was established in 2006. Since its founding 13 years ago, it has connected with more than 10,000 companies, and on average, 1 out of 30 companies gets Qiming’s investment according to Qiming’s official website. 70% of Qiming’s investment focuses on round A and B. Many of the companies funded by Qiming have become industry leaders in 2–7 years.

Among the 14 funds with the most number of unicorns in their portfolio, only five of them are local Chinese funds or companies: Tencent, Alibaba, Shunwei Capital (co-founded by the Co-Founder of Xiaomi), Zhen Fund (co-founded by Co-Founders of New Oriental Xiaoping Xu and Qiang Wang), and Kaifu Li ’s Sinovation Ventures. The rest are either started by foreign/non-Chinese mainland VCs or anchored by foreign LPs. For example, one of the major LPs of Hillhouse Capital run by Mr. Zhang Lei is the Yale Endowment Fund under Yale University, where Zhang Lei attended school. Morningside VC belongs to the Morningside Group, which was founded in 1986 by the Chan family in Hong Kong.

In terms of the headquarters of these funds, 8 of the above 14 have headquarters in Beijing, three are located in Shanghai, one in Shenzhen, one in Hangzhou, and one in Hong Kong. This partially explains why Beijing has far more unicorns than any other city in China. With discussions around Shenzhen being China’s next tech megacity, Beijing is still the number one major tech hub in China for venture capital and startup innovation. Beijing’s government-sponsored Zhongguancun is like the SF SOMA area with numerous major tech companies and startup activities.

Bubble or real innovation?

Since the release of Hurun’s list, there has been some controversy in the Chinese venture capital community. The debate can be divided into two groups: one group is thrilled with the Chinese internet development and takes pride in China winning over the United States in terms of unicorn hits for the first time. While the opposite voice questions the quality of these unicorns, even describing them as “using fake stories to fool the VCs and the public.”

One of the commenters of Huxiu Media, a renowned Chinese media outlet known for its acute views and opinions, studied the complete list of the 206 Chinese unicorns and summarized in one sentence: “No technology, not even innovation, in the country of the blind, the one-eyed man is King.”

He also added that Ant Financial, Bytedance, and Didi were listed only because they have not yet been listed, and their valuations which are hundreds of billions of yuan have disqualified them from being considered as startups.

Companies with valuations ranging from $1 billion to $10 billion can roughly be divided into several tags: middleman landlord, fintech (internet finance), used car sellers, movies, online courses, pseudo AI, electric vehicles, and e-commerce. There aren’t many high tech companies in China. The number of companies in education such as application-based platforms that teach English, helps with test preparations online are overwhelming. The so-called fintech in China turns out to produce companies that are very similar to Spiltwise and Lending Club. There is also an abundance of e-commerce companies that sell consumers groceries, alcohol, international goods, and so on. They didn’t make it because of their technology innovation, but simply as a result of China’s highly lucrative market.

5G is also a trendy topic in China. Many media commentators and the Chinese public are very excited about 5G because one of the applications that could benefit from it is remote surgery. Doctors can conduct operations remotely with 5G, potentially helping Chinese patients in remote villages in provinces like Sichuan, Xinjiang, Guangxi, etc. However, no company has developed the capability to create surgical robotics that can function remotely so far in China. The difficulty lies not in the bandwidth of the internet, but in the technical and mechanical development of the robotic arms.

Among the ten Chinese unicorn companies that are in the big data industry, eight of them focus on risk control before loan and credit analysis. Some of them become prosperous solely thanks to the orders from the central government, and the rest just have relatively trivial businesses.

The truly valuable data in China is in the hands of the Internet giants. The giants dominate the major data portals and collect an infinite volume of data everyday. They use the data to develop consumer products or exchange information with each other, therefore forming an oligopoly to prevent new companies from entering the industry.

AI’s usage in security cameras with facial recognition at Beijing Airports and every subway station in China, despite having numerous applications, also faces challenges in terms of technological advancements.

Chinese conversational AI by the end of 2019 is still at a very primitive level. The function only goes so far as setting up an alarm clock, turning off lights, etc. It cannot even hold up a simple dialogue beyond three exchanges.

Another example pertains to the Chinese semantic recognition company with a $1 billion valuation. Its function can only respond to you in various subjects such as relatives’ relationships, idioms, horoscope analysis, animal category, poetry, unit conversion, medical guidance, the applications with strong Chinese characteristics and cultural significance. It remains a mystery how well the semantic recognition really can be.

Even some of the Chinese netizens believe that China’s innovation is a big, fluffy, boring bubble without real development. Of course, they made this comment based on their “familiarity” with China’s mobile advancement, its consumer development, as well as how the Chinese internet came to be. Like how every story goes in the technology world, whether it’s a bubble or real innovation, only time can tell the truth.

Partial list of China’s unicorn companies

Below, we listed briefs on some companies that belong to the list, and we believe they are worth looking at. If there’s any other companies or topics you would like to know, please leave us a comment and we will do our best to deliver content tailored for it.



Taopiaopiao is one of the largest online ticketing platforms for movies in China. Taopiaopiao enables users to conveniently browse trending and upcoming movie information, including showtime, trailers, posters, descriptions, reviews and so on.



JD Logistics is a supply chain and fulfillment platform for e-commerce industry. JD Logistics aims to reduce logistic costs and provides holistic logistic solutions through services covering storage, transportation, delivery, customer service, order processing, cold chain, logistics cloud and so on.



JDD works to connect financial and physical industries with digital technology in order to help the industry improve its level of internet, digitization, and intelligence. With core technologies of AI and IoT, JDD has completed comprehensive layout in the fields of digital finance, digital city, digital campus etc.



NetEase Cloud Music is a online music platform. Other than basic music playing and downloading functions, NetEase Cloud Music also provides music social functions such as trending comments, personalized recommendations, and radio stations.



Youdao is a leading intelligent learning company. Youdao has leveraged its big data and computing technology to create core businesses in translation, personal cloud application, and e-commerce shopping guide service. Youdao announces its IPO at NYSE on October 25, 2019.



Du Xiaoman Financial is an operator of an online payment system with small financial licenses. The company’s payment system includes online credit service, mobile wallet, online payment services and online wealth management platform backed by financial licenses like fund sales license and third-party payment license.



Shuhai Logistics is a food supply chain service enterprise that combines sales, R&D, production, storage, transportation, information and finance services together. It provides food supply chain solution to vendors all around China and it is one of the most recognized companies in the sector.



58 Daojia is a multi-category local services platform. The company provides information on and access to high-quality offline services such as cleaning, moving, babysitting, beauty care, and many other categories in approximately 30 cities in China. With its location-based order processing system, 58 Home’s platform directly connects customers to the nearest independent service providers.



Cainiao Logistics provides logistics services and operates warehouses and express delivery stations. Cainiao Logistics also operates a logistics information platform that provides real-time access to information for both buyers and sellers.



Webank is a provider of online banking services. The company offers an online platform that offers personal banking, corporate banking and international banking services to individual customers and small and micro-businesses.



Lufax is an online marketplace for the origination and trading of financial assets. Lufax is the largest internet finance company in China. It has developed China’s most open, safe and convenient investment and financing platform. Investors come to Lufax for its broad product offering, diverse liquidity avenues, and superior user experience. Asset owners look to Lufax to help them structure, price and place complex assets to investors in a credible and transparent manner.



Bitmain is a manufacturer of bitcoin mining hardware designed to offer cryptocurrency. Bitmain’s hardware develops and sells bitcoin miners using ASIC chip technology, enabling users to get high quality and efficient computing chips, high-density server equipment, and large scale parallel computing software.



Meicai is an online fresh food aggregator platform designed to connect farmers and restaurants. Meicai’s platform cuts out the middlemen by allowing customers including businesses and restaurants to order directly from the farms, enabling framers to sell vegetables directly to restaurants easily.



Manbang is a mobile application designed to offer truck-hailing services. Manbang’s application matches merchants and truckers for transporting cargo, as well as offers services such as stored-value toll cards and diesel cards, enabling enterprises to get trucking services for transporting bulk commodities.



Megvii is an Artificial Intelligence company specialized in providing enterprises and developers with intelligent solutions and data services. Megvii seeks to build AI Engine, a core fundamental technology powering various AI application leveraging on recognition, control, optimization and other algorithms to connect individuals, objects and scenarios, building a product platform of IoT OS.



Royole is a manufacturer of advanced flexible displays, flexible sensors and smart devices designed to improve the way people interact with and perceive their world. Royole’s advanced flexible technologies provide IP licenses and services for a variety of industries associated with display and flexible electronics applications.



Ximalaya is a developer of an online audio streaming platform. The company’s platform enables streaming user-generated music and other audio content through web and mobile devices. It currently has more than 480 million users on its platform.



MissFresh sells daily grocery products through its mobile based platform. It aims to provide a one stop shopping experience and help users save time and effort for their trips to the grocery store.



Yuan Fudao is an online education platform. The company’s platform offers an online database of test exams and practice materials providing students an electronic educational platform to prepare for their college and high school entrance examinations.



Cambricon Technologies builds core processor chips for intelligent cloud servers, intelligent terminals, and intelligent robots. The Cambrian is the world’s first smart chip company with successful outflow and mature products and has two product lines, terminal, and server.



Golden Education is one of the world’s leading educational organizations in finance and business with courses covering more than 100 categories including accounting, securities, futures, banking, and other industries. Golden is devoted to providing education services and endeavored to construct a comprehensive ecosystem for finance professionals.



Lvmama Tourism is a business-to-consumer based e-tourism website, as well as a platform for DIY tour advisory and booking in China. It entered the market as a DIY tour service, and after development for many years, Lvmama finally formed a comprehensive tourism website with the DIY tour as the core characteristic, with discount tickets, free walkers, and resort hotels as its main components.



Mia.com is an e-commerce platform that offers maternity dresses, milk powders, diapers, shoes, and blankets. It also provides an online retail platform for baby products such as toys, diaper, and formula products.



To8to provides services for users to find contractors to renovate and decorate their apartments. The platform currently has nearly 60,000 decoration companies and 700,000 designers from 80 cities in China.



Weidian operates as a Chinese e-commerce platform. The micro store is a social relationship-based e-commerce platform dedicated to helping people with dreams to become more entrepreneurial. It is also committed to providing consumers with a useful, fun and attitude-oriented shopping platform.



FangDD is an O2O real estate platform in China that facilitates transactions between property sellers and homebuyers through real estate brokers. FangDD works on a “pay-for-performance” business model instead of charging fees for every listing like other domestic online estate services. Currently, FangDD is in cooperation with over 100,000+ brokers, has offices in more than 30 cities and employs around 2500 people.



Haodf.com operates a healthcare community platform offering medical sites, hospitals, and information to help patients find doctors. After several years of rapid development, Haodf.com has become the largest medical triage platform in China.



Hellobike develops and provides a bike-sharing mobile application. Its application promotes the development of the shared bicycle segment market through cooperation with the traditional car rental businesses and scenic spot supervision agencies of the tourist attractions.



Horizon Robotics is the leader of embedded Artificial Intelligence. The company provides integrated and open embedded Artificial Intelligence solutions of high performance, low power, and low cost. The company envisions the world’s more than 1,000 devices, such as autonomous vehicles, to be equipped with “brains”, becoming intelligent entities that have the ability from perception, understanding to decision-making for safety, convenience, and fun.

Reference (all articles are written in Chinese)






About Hurun Report & Hurun Institute: Established as a research unit in 1999, Hurun Report Inc. has grown into a leading luxury publishing group based in Shanghai, China. Today Hurun Report is widely recognized as the foremost authority in tracking the rapid changes amongst China’s high net worth individuals. hurun.net


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