Sunday, 3 June 2018

Crunchbase/Savannah Dowling: 8 Private Chinese Unicorns You Need To Know Venture

Crunchbase

8 Private Chinese Unicorns You Need To Know
Venture
May 31, 2018
Savannah Dowling is a reporter at Crunchbase News.
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In the past ten years, China has reshaped the way that tech enthusiasts look at global startup growth and venture capital. Crunchbase News has explored the differences in sheer round size between companies based in the U.S. and China, finding that in the five years between 2012 and 2017, the average Series A in China was more than three times that of the U.S.

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Tech heavyweights like Baidu, Alibaba, and Tencent, collectively referred to as BAT, have contributed to a broader Chinese tendency to compete for market dominance with high-cash burning efforts in industries like ridesharing, ticketing, and bikesharing. This competition, fueled by the potential in China’s increasingly tech savvy population, as well as dominance in markets elsewhere, has brought with it rounds of unheard-of amounts. Some companies, like Xiaomi, Didi Chuxing, Meituan-Dianping, and Sensetime, have been on the receiving end of more than a few of those super-giant rounds.

On the other hand, tensions in the U.S.-China trade relationship have (further) complicated cross-border investment relations. These concerns have intensified debate between governments over the protection of U.S. companies operating in China, as well as the ability for Chinese companies to operate in the U.S. China’s cybersecurity law remains an importantly divisive issue in this relationship for U.S. companies, and Huawei, ZTE, and Xiaomi are just a few Chinese companies which have faced backlash as a result of protectionist Trump-era policies.

With the flurry of news coming out of China concerning trade regulations and massive deals, it can be difficult to keep track of who’s who in China. But we’re here to help you fix that. We’ve produced a list of some important private Chinese unicorns that you should definitely know about.
China Bets On Ridesharing And Media Content

The most highly valued of the companies on our list, which is ranked by valuation, is Didi Chuxing (dee dee choo shing). Last week, Crunchbase News took a deep dive into the rise of China’s ridesharing giant in the face of fierce competitors and tight regulations. As a brief overview, the startup began as Didi Dache, a taxi hailing app backed by Tencent. After acquiring its Alibaba-backed rival, and then Uber China, the company has grown to dominate ridesharing.

“As of Q1 2018, DiDi completes about 30 million rides a day across its 11 verticals and has over 500 million registered users,” Didi Chuxing spokesperson, Michaela Shaw, told Crunchbase News in an email. She added that the company has expanded into lower tier cities in China and into categories like food delivery and bikes. Further, the company is known to have invested in global Uber competitors including Brazil’s 99, Singapore’s Grab, Dubai’s Careem, and Lyft.

Another company, Toutiao (tow teow), like Tencent, is a perfect example of a company that capitalized on the growing use of mobile in China.

Since 2012, the Sequoia-backed company has raised more than $3 billion, according to Crunchbase. It’s latest $2 billion round was led by General Atlantic in August 2017, bringing its valuation up to $20 billion.

Like Didi Chuxing, Toutiao expanded using capital for acquisitions and investments. The company acquired China-based online payment agency Ulpay in January. Last year, Toutiao acquired the popular U.S.-based video social network Musical.ly for $800 million in November and Los Angeles-based video sharing platform Flipagram. According to Technode, the company reported 120 million daily active users in 2018. As of September 2017, the average time spent by users on Toutiao every month was 992 minutes.

Unfortunately for Toutiao, it is also shining example of the intertwined and complicated relationship between politics and business in China, especially where it regards content production and dispersion. In April, Toutiao was ordered to suspend it’s main platform’s operations for three weeks due to concerns regarding the social and political implications of the content it presented to its users.

However, even as the government monitors closely, many companies have still managed to rise in the global ranks in industries ranging from social media to artificial intelligence. The following are eight notable companies that Crunchbase News decided to highlight.
Company Name    Description    Valuation
Didi Chuxing    China's ridesharing giant.    $56 billion
Xiaomi    A global giant selling affordable smartphone and IoT devices.    $46 billion
Meituan-Dianping    Chinese mobile internet e-commerce platform.    $30 billion
Toutiao    Personal news and media aggregator.    $20 billion
LuFax    Peer-to-peer lending platform.    $18.5 billion
Pinduoduo     Online retail e-commerce platform.    $15 billion
DJI Innovations    Leading global drone company.     $10 billion
SenseTime    The highest valued AI company in the world.     $4.5 billion

Did I miss anyone important? Let me know on Twitter @sav_dowling.

Illustration Credit: Li Anne Dias
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