Aileen Lee, a famous American investor, named the startup with private equity and open market value evaluated over USD 1 billion and founded not more than 10 years a “unicorn” in 2013. This concept first became popular in Silicon Valley and then spread quickly across the world.
As the origin of unicorn concept, the US has the largest number of unicorn enterprises in the world. However, such advantage is disappearing because of the rapid rising of Chinese unicorns.
According to the list of global unicorns published last September by CB Insights, a well-known American venture capital investment agency, There are 59 new global unicorns in 2017, 19 of which were from China, accounting for nearly 1/3 of the global increase. CB Insights also pointed out in its articles that the dominance of US in the global unicorn map had been wavered, with its share of unicorns decreasing from 75% in 2013 to 41% in 2017 (the first three quarters). China saw its number of unicorns exceed that of Europe in 2015 and approach that of US.
It is noteworthy that China achieved a breakthrough of zero in terms of its unicorns just in 2014. Apart from the drastic increase in number, Chinese unicorns also perform well in “quality”. In the 2017 global unicorns list released by CB Insights, China’s Didi Chuxing, MIUI and Meituan-Dianping entered top 10.
Featuring late starting, short growth cycle and strong explosive power, Chinese unicorns have been rising rapidly, echoing with the rapidly rising Chinese economy. That is deemed as one symbol for China transforming itself into a global power.
Currently, Chinese unicorns mostly gather in first-tier cities like Beijing, Shanghai and Shenzhen. But the development of unicorns in other cities is also remarkable.
Recently, Chengdu, a city in western China, has been very aggressive in attracting and incubating unicorns.
Last December, Chengdu municipal government initiated collection of overall design proposals for China’s first “Unicorn Island”, with an aim to gather global wisdom, create a scenario incubation base and ecological innovation area for unicorns, and build Chengdu into a base for unicorns of China and even the whole world in the future.
The international review meeting on design proposals was held in Chengdu in March this year. Numerous well-known international design studios attended the meeting. The final design proposal will be published in the near future. According to the planning, “Unicorn Island” will not only provide sites for already formed unicorns but also cultivate and incubate the unicorns of Chengdu.
Xu Guanlin, Lifelong Honorary President of the Nanyang Technological University of Singapore, believes that Chengdu’s livability is a great competitive advantage in creating the Unicorn Island. “In West China, if there is a city capable of developing a gathering place for unicorns, it must be Chengdu”, said Xu. When looking back on the economic development history of America, the earliest development happened in eastern coastal areas and then extended toward the inland. The big city in Midwest Chicago is one of the world famous international financial centers, and also an international transfer station. Chengdu has great potential compared with developed eastern China.
The Report on Development of Chinese Unicorn Enterprises in 2017 published by Torch Center of China’s Ministry of Science and Technology and related professional institutions in this March showed that Xinchao Media Group Co., Ltd. had become the first unicorn enterprise of Chengdu with an estimated value of USD 1.5 billion. Chengdu local companies such as Chengdu XGIMI Technology Co., Ltd. and Medlinker were rated as the companies most likely to rapidly join the unicorn club in 2018.
To better foster excellent local enterprises, Chengdu held a survey to all the local enterprises at the end of 2017. The survey demonstrated that there were 31 potential unicorns in Chengdu (Potential unicorns refer to companies founded within 5 years with an estimated value of USD 100 million or founded more than 5 years with an estimated value between USD 500 million and USD 1 billion). In fact, Chengdu has put forward the goal of achieving more than 7 unicorns and more than 60 potential unicorns by 2022.
Just like other Chinese cities, the rapid development of Chengdu unicorns is fueled by relevant preferential policies that support local enterprises and attract foreign enterprises in recent years. Zhong Bo, CEO of XGIMI, is quite impressed with that. He says, young people who choose to start their own business in Chengdu are prominently attracted by the local entrepreneurship environment where one can find many like-minded partners. Besides, Chengdu’s support and preferential policies for startups also attract young people to Chengdu to realize their own dreams.
The rapid development of Chengdu unicorns demonstrates the improvement of China’s overall technology innovation strength. Maybe in the near future, we can see more unicorns in West China and “Unicorn Island” may become next Silicon Valley.
Source: Chengdu Municipal Government