China unicorn total surpasses 160
China had 164 unicorns worth a collective $628.4 billion at the end of last year, a government report stated, as the prospect of A-share listings by domestic internet companies was once again raised.
Ant Financial, Alibaba Group’s financial services affiliate, led the way with a valuation of $75 billion, the 2017 China Unicorn Enterprise Development Report found. It was published by the Ministry of Science & Technology. Ant Financial was followed by Didi Chuxing at $56 billion, Xiaomi at $46 billion, Alibaba Cloud at $39 billion, and Meituan Dianping at $30 billion. They are among 10 companies with valuations of more than $10 billion.
To be considered for the list, a company must be privately held, have a corporate history of no more than 10 years, and a valuation of more than $1 billion. The number of qualifying businesses is up more than 25% on the previous year. More than half of them come from the fields of e-commerce, internet finance, healthcare, culture and entertainment, and logistics.
Beijing accounts for 70 entrants, compared to 36 in Shanghai, 17 in Hangzhou, and 14 in Shenzhen. A total of 125 are based in high-tech zones, with all 70 of the Beijing representatives headquartered in Zhongguancun Science Park. Viewed in a venture capital context, Sequoia Capital China has 35 portfolio companies on the list, followed by IDG Capital, Matrix Partners China and Qiming Venture Partners with 16 apiece.
A Xinhua News Agency report quoted Dongke Zhang, a deputy director of the Shanghai Stock Exchange, as saying that it is time for public markets to embrace new economy businesses. He envisages the creation of a multi-layered blue-chip board featuring technology-driven companies.
Several offshore listed Chinese internet companies have indicated their willingness to trade on a mainland bourse as well, should a suitable mechanism be put in place. The China Securities Regulatory Commission (CSRC) has said it is working on a Chinese Depository Receipt (CDR) system that would allow shares in these companies to be issued by local depository banks, listed on the A-share market, and settled in renminbi.
The regulator is also reportedly developing a mechanism to fast-track domestic IPOs of unicorns focusing on biotechnology, cloud computing, artificial intelligence, and high-end manufacturing.
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