China may have overtaken the US in terms of the number of unicorns its breeding amid a deepening rivalry between the two countries over who will dominate the most advanced technologies.
China has 206 unicorns—startups valued over $1 billion—compared with 203 for the US, according to the inaugural Hurun Global Unicorn List 2019 released yesterday (Oct. 21) by Shanghai-based publishing group Hurun Report, which also publishes annual lists of Chinese billionaires. In total, the firm said there were 494 unicorns located in 24 countries worldwide as of June 30. The unicorns examined were founded in the last two decades.
China’s top startups were digital payments giant Ant Financial, which was spun out of Alibaba in 2011 and is valued at $150 billion; Bytedance, the parent company of social media sensation TikTok, valued at about $75 billion; and ride-hailing giant Didi, valued at over $50 billion.
According to Hurun, the most valuable US startups are Infor, a software company valued around $49 billion that is preparing to IPO, and e-cigarette maker JUUL Labs, valued at around $48 billion according to the list, though that has declined amid the new concerns over the health risks of vaping.
China has been steadily gaining on the US when it comes to growing the world’s most valuable startups, but this is the first list to put China ahead. Meanwhile, a report updated through Oct. 17 from research firm CB Insights found the US had more than 200 unicorns, nearly double the number in China. Quartz has reached out to Hurun and CB Insights with questions about the differences in their methodology—CB Insights doesn’t, for example, include Ant Financial on its list of China unicorns.
An earlier 2017 report from the consulting firms Deloitte and China Venture found that China had 98 unicorns, only slightly fewer than the US with 106.
India, the UK and Germany followed the two countries on the list with 21, 13 and seven unicorns, respectively, while e-commerce created the most startups on the Hurun list—accounting for 68 of the total—followed by fintech with 56, and cloud computing with 44 companies. In recent years, China’s newest unicorns appear to be coming from a wide variety of sectors, from robotics, to AI, to educational tech and cosmetics.
The announcement of the list comes against the backdrop of the ongoing trade fight between China and the US, which has seen Washington put some of China’s tech champions, such as Huawei and Hikvision, on a trade blacklist that essentially forbids the companies from getting US technology.
Amid US tariffs on billions of dollars of Chinese goods, and a slowing economy, China has seen a plunge in investment in Chinese unicorns this year, which could see the rosy valuations on the Hurun list reduce.
The US co-working startup WeWork offers a cautionary tale. On the Hurun list it appears valued at $30 billion, but as of this week it’s reported that Japan’s SoftBank hopes to take over the cash-crunched company at a valuation between $7 billion and $8 billion.