Introduction
Unicorn enterprises represent the vitality of the new economy, the industry's megatrend, and the competitiveness of the industry. 2018 global capital market winds and clouds, the unicorn forces reshuffle. Some unicorns have difficulty financing, halo no longer; some unicorns have gained capital pursuit, shine; some even have the potential to surpass the old Internet enterprises.
Following the China Unicorn Report: 2018, which sensationalized the market, what are the major changes in the 2019 unicorn list? What tech trends and investment opportunities are revealed?
Table of Contents
1 Global Unicorns
1.1 The weight of China and the U.S. has increased, but for the first time, China's nascent growth rate is lower than that of the U.S.
1.2 The weight of high-tech companies has increased
2 Chinese Unicorns
2.1 Geographic distribution: Beijing maintains the lead, and unicorns in new first-tier cities are developing rapidly under the support of policies
2.2 Business model: in order to improve the ecological layout, the role of the giant drive has been strengthened, and the ATD has replaced the BAT
2.3 Sectoral distribution: the concentration of the Internet, high-end manufacturing, and high-tech
2.4 Cash flow The real situation is not up to expectation
3 Challenges and Suggestions
3.1 The three major problems that need to be solved urgently: low technological content, poor continuity of business operations, and the limitation of the birthplace
3.2 Suggestions
Full Text
1. Global Unicorns
It has been six years since the concept of "unicorn" was proposed by Aileen Lee, a famous investor of CowboyVenture in the US, in 2013, and the global unicorns with a short time of establishment (less than 10 years) and rapid development (valued at more than USD 1 billion) have been recognized as the most important ones in the world. New eco-companies with a short time of establishment (less than 10 years) and rapid development (valuation of more than 1 billion dollars) have been born at an accelerating pace, and have gradually become an indicator of the degree of activity of the new economy of a region or country. As the world's two largest economies, China and the United States have undoubtedly become the best place to breed unicorns.
1.1 China and the U.S. are ahead of the pack, but China's nascent growth rate is lower than the U.S.'s for the first time
The number of unicorns in the world is at a record high, and China and the U.S. continue to increase their share. According to IC Insight data statistics, from 2013 to December 31, 2018, the total number of global unicorns reached 313 units. By geographical division, comparing the same period, the top five rankings remain unchanged, in order of the United States, China (including Hong Kong, China), the United Kingdom, India and South Korea, with the number of 151, 88, 15, 14 and 7, respectively. From the percentage point of view, China and the United States still lead the global unicorns and influence to strengthen, the global share of 76.3%, compared with the same period in 2017 accounted for 0.4 percentage points.
China and the United States dominate the super unicorns, accounting for more than 80%. By definition, on top of unicorns, startups with a valuation of more than $10 billion are called super unicorns. Based on this, 22 companies were included in the lineup in 2018 globally***, of which Ant Gold Service ranked first with a valuation of up to $150 billion. In terms of and region, the U.S. and China had the highest number, 12 and 7 respectively, accounting for 86.4% of the total, while the rest were the U.K., India, and Singapore, with a number of one each.
The growth rate of the number of newborn unicorns in China was lower than that of the United States for the first time. From the point of view of the number of newborns, China and the United States together accounted for more than 70% of the global share, maintaining the advantage since 2013.In 2018, the United States ranked first in the number of newborn unicorns with 53, and China ranked second with 32 newborns. Comparison of the number of newborns and the growth rate of the number of newborns found that for the first time in China, the proportion of the decline and growth rate lower than the United States phenomenon, the proportion of 28.6% year-on-year decline of 5 percentage points, the gap with the United States of America's newborns accounted for the proportion of the gap widened from 9.2% to 18.8%, and the growth rate of newborns of 45.5%, only half of the United States. The gap between the number of unicorns in China and the United States has widened.
China's market financial deleveraging, wind breaks, regulatory tightening, the industry began to "self-check" and "elimination of clearing" is one of the important reasons for this gap. With the domestic hottest wind mouth cryptocurrency in 2017, *** enjoy single car, etc., and in the context of strict regulation, such as the "private fund managers registration instructions", "on the development of 2018 private fund special inspection work notice", the capital side tends to be rational, the investor on the newborn, the prospect of the unknown start-up enterprises to maintain a more cautious attitude, and more inclined to the head of the mature enterprise
Note: The total number of unicorns in the current period = the total number in the previous period + the number of newborns - the number of exits such as IPOs, mergers and acquisitions. Therefore, the number of newborns is not necessarily equal to the number of year-on-year increases.
Looking at the average valuation by country , first, Chinese unicorns are the most expensive globally, with an average valuation of $5.96 billion, which is about twice the average valuation of the rest of the world and the region. Second, South Korea's unicorns grew the fastest, with the average valuation rising from $2.95 billion to $3.93 billion, mainly due to the emergence of three highly valued unicorns, one for the existing e-commerce company Coupang, and two newborn unicorns, namely takeaway delivery platform Woowa Brothers and game production company Bluehole. third, India was the most expensive of the top ten countries in terms of average valuation, with the average valuation of $3.96 billion. valuation decreased the most, with the average valuation dropping from $3.94 billion to $2.79 billion, mainly due to the acquisition of India's largest unicorn, e-commerce sector's Flipkart, by Walmart at a pre-acquisition valuation of $11.6 billion.
1.2 Increase in the proportion of high-tech enterprises
Increase in the number of emerging high-tech enterprises. From the perspective of industry distribution, enterprises are mainly distributed in three categories: Internet, high-end manufacturing and high-tech. Similar to the previous list, the top three industries remain unchanged this time, in order of e-commerce, tools and software and financial technology, respectively, 40, 38 and 37. Unlike the previous period, the combined share of the three declined considerably, by about 10 percentage points. This is mainly due to the increase in technology-oriented high-end manufacturing and high-tech companies among the nascent unicorns. Among the global nascent unicorns in 2018, there were 28 companies*** including new energy vehicles, artificial intelligence chips, robotics, big data, computer vision, cloud computing, etc., an increase of 9 companies, or nearly 50%, compared with 2017.
The United States accounts for half of the newborn high-tech enterprises, and continues to lead the global development of new technologies. From the 28 newborn high-end manufacturing and high-tech enterprises, China*** has 8, more evenly distributed in artificial intelligence, robotics, new energy vehicles and big data. The United States *** there are 14, the total number of newborn accounted for 50%, a richer variety of industries, in addition to biopharmaceuticals, 3D printing, DevOps (a new type of integrated software development, the development, operation, quality management of the three combined) and so on. Among them, the U.S. newborn high-tech enterprises are more well-known, including the highest valuation of $ 12 billion for the hair loss problem of Samumed, for enterprises to improve data analysis and cloud services Snowflake Computing, robotics process automation management Uipath.
2 Chinese Unicorns
In addition to the international definition, this report uses the time of establishment as the cutoff point, divided into broad unicorns and narrow unicorns, broad unicorns, i.e., unlimited time of establishment, and narrow unicorns, which need to be less than 10 years. In selecting the target, we mainly examine the following four points: 1) the core value of the enterprise's products or services; 2) the flow value of the enterprise's products or services; 3) the radiation value of the enterprise's products or services; 4) the value of the business model.
When measuring valuation, since unicorns are unlisted and most of them are Internet companies, the following three valuation methods are mainly adopted:
1) multiplier valuation method, which includes price-earnings ratio and price-sales ratio.
Price-earnings ratio: valuation = net profit * price-earnings ratio, which is generally not used due to the fact that the vast majority of unicorns are in the red during their development or even maturity.
P/S ratio: valuation = main business revenue * P/S ratio. Early Internet giants, such as Amazon, Facebook, Jingdong, etc., use this method, which is more suitable for B2B, e-commerce and other types of enterprises, but the measurement needs to pay attention to the size of the enterprise.
2) Comparable company law. You can measure against listed companies with similar business models or unlisted companies with clear valuations in accordance with the characteristics of the business.
3)Financing investment method.
According to the amount of investment in the past, the proportion of the operating conditions of the enterprise at the time of the projection, but also in accordance with the amount of investment in the investor's corresponding shares to measure.
Accordingly, combined with the list released by Hurun, CB Insight, the Torch Center of the Ministry of Science and Technology and PitchBook, comprehensive combing, As of December 31, 2018, there were 161 broad unicorns in China with a total valuation of $713.49 billion, of which 137 narrow unicorns with a total valuation of $652.49 billion , distributed in 15 cities and 14 industries, of which 10 are super unicorns***, 54 are newborns, 19 are listed and withdrawn, and 3 are removed due to mismanagement. In comparison to the previous period, the characteristics of China's unicorns in terms of fast growth, wide range, and strong outbreaks have become more and more obvious, which is inseparable from technological innovation, building platform ecology, and local government support and attention (for more details, please refer to the China Unicorn Report).
2.1 Geographic Distribution: Beijing maintains the lead, with rapid development of unicorns in new first-tier cities under the support of policies
Beijing is the first city in China to absorb and catalyze 74 unicorns.
Beijing is the first city in China to attract and promote 74 unicorns.
Beijing is the first city in China to attract and promote 74 unicorns.
Beijing is the first city in China to attract and promote 74 unicorns. 94.5%. Among them, 74 unicorns*** in Beijing, an increase of 16 from the previous period, with a total valuation of US$297.94 billion, topped the list, accounting for 46% of the number, an increase of 1 percentage point from the previous period, with the proportion continuing to increase; 34 unicorns*** in Shanghai, an increase of 6 from the previous period, with a total valuation of US$132.51 billion; 16 unicorns*** in Hangzhou, an increase of 2 from the previous period, with a total valuation of US$194.65 billion; 14 unicorns*** in Shenzhen, an increase of 1 percentage point from the previous period, and an increase of 1 percentage point from the previous period. ***14, an increase of 4 from the previous period, with a total valuation of US$49 billion. In addition, Beijing continues to lead the high valuation unicorns, valuation of the top ten companies Beijing accounted for half.
The cities represented by Nanjing are starting to break through the limitations of "North, Shanghai, Hangzhou and Shenzhen", and the unicorns of the new first-tier cities are on the rise.
From the point of view of the new 54 enterprises, this year's new cities Hefei, Qingdao, Chengdu and Hong Kong began to birth unicorns, last year's new cities in Nanjing, Wuhan, Chongqing and other places have increased the number of unicorns, unicorns, "two-eight effect" still exists, but it began to diminish (i.e., 20% of the city occupies 80% of the unicorns), of which Nanjing is the most outstanding performance, **** newborn 5 enterprises.
Strong innovation vitality, high policy attention and support are important reasons for the short-term outbreak , in Nanjing, for example, in order to enhance the city's innovation capacity and cultivate more new types of enterprises, in April 2018, Nanjing released the "White Paper on the Development of Unicorn and Gazelle Enterprises in Nanjing" and defined the key enterprises for cultivation, which requires that the enterprise's starting annual revenue is not less than RMB 5 million, with a growth rate of not less than 50% for three consecutive years, and in line with Nanjing's "4+4+1" leading industries of new electronic information, green intelligent automobiles, high-end intelligent equipment, biomedicine and energy-saving and environmentally friendly new materials, the four major service industries, and future industries. However, unlike other cities, Nanjing does not directly give cash incentives, but by building platforms, grafting resources and other indirect means to solve the problem of resource demand during the start-up period of the enterprise does not match, in addition to the introduction of the "Nanjing on the gazelles, unicorns, enterprises to be listed on the "one enterprise, one policy" incentives to the implementation of the rules" made
2.2 Business model: To improve the ecological layout, the role of the giant drive to strengthen the ATD instead of BAT
The giant drive to become the birth of a unicorn another major influence, and the influence of the proportion to strengthen.
Unicorns have become an important part of the corporate ecosystem under the current trend of corporate ecology. Through self-incubation or strategic investment, many giant enterprises have begun to build ecosystems and gradually improve them. As can be seen from the list, about 50% of the enterprises are more or less related to Alibaba, Baidu, Tencent, Jingdong and so on. Among them, the higher the valuation of the enterprise, the stronger the influence of the giant on it. From the valuation of the top ten enterprises, the degree of association with the giants is as high as 100%, an increase of 10% over the same period last year.
From the investment side, ATD (Alibaba, Tencent, Jingdong) replaced BAT as the top three Internet giants in the field of investment in the new economy. Alibaba and related companies to 124 global investment events, more than 180 billion yuan investment amount ranked first, the investment of the top five industries were 19 business services, e-commerce 17, automotive transportation 16, finance 15, artificial intelligence 10; Tencent and related companies global investment of more than 132, a total of more than 90 billion yuan, more than Ali focused on the E-commerce and financial sector, Tencent prefers culture and entertainment and the game field, the top five industries for investment in entertainment and media 42, 18 games, corporate services 20, 10 financial, automotive transportation 12; Jingdong is more different, focusing on heavy assets such as logistics, such as the field of the annual investment of more than 50, involving an amount of more than 20 billion yuan, the investment of the top five industries for corporate services 13, The top five sectors of investment were 13 in business services, 7 in e-commerce, 6 in finance, 4 in finance, and 3 in logistics and transportation. Despite the different focus, back to the essence, the three are adhering to their own strengths in the field and as a starting point, to the data as the core, technology as a means to gradually improve the ecological layout.
From the end of the results, Alibaba and Tencent have a stronger role to play in driving unicorns. According to incomplete statistics, in 2018, Tencent **** captured 30 Chinese unicorns, the same as last year, including head enterprises in niche areas such as Little Red Book, Car Much, Fast, Ape Tutoring and so on. Alibaba rapidly improved, from seventh to fourth, and for the whole year*** bagged 17 unicorns, including Today's Headlines, Little Pig Short Rentals, Kuangshi Technology, Shangtang Technology and so on.
2.3 Industry Distribution: Concentration of Internet, High-end Manufacturing and High-tech
Unicorns can be categorized into platform ecological and technology-driven according to their innovation form.
Platform ecological type is mainly based on the Internet to build a platform, the core idea is to rely on the platform "**** enjoy". In terms of industry distribution, the same as in the previous period, entertainment media, automotive transportation and e-commerce are the top three industries, with 25, 23 and 17, respectively, and the three industry representatives are, in order, Today's headlines valued at 75 billion U.S. dollars, drip travel valued at 45 billion U.S. dollars, and Xiaohongshu valued at 3 billion U.S. dollars.
Technology-driven is to take high-tech as the main driving force, such as big data, cloud computing, artificial intelligence, blockchain and so on. From the point of view of specific enterprises, high-end manufacturing, artificial intelligence, etc. began to appear a number of high-quality key enterprises, for example, focusing on the flexible screen of the Zouyu Technology, focusing on artificial intelligence of the Shangtang Technology and Kuangshi Technology, focusing on robotics of the Ubiquitous, etc., and the ranking and valuation of the rise of the larger.
When the combination of platform ecological and technology-driven, will play a greater role. From the point of view of valuation changes, Ant Gold Service and today's headlines have the highest changes, with a valuation increase of $75 billion and $45 billion respectively. In addition to relying on the platform to build a large user base and capital relationships, and choosing the right track, the use of big data, artificial intelligence and other emerging technology tools is the key to maintaining their advantage. And technology performance is more important in the late stage of business operations, valuation of the top ten companies more than 80% can not be separated from the technical attributes.
2.4 Realization: Listings are frequent, but the reality is not up to expectations
China's unicorns are listed frequently, with Hong Kong and the US being the main choices. According to statistics, in the whole year of 2018, China*** 19 unicorns realized listing, with pre-listing valuation ranging from 1 billion US dollars to 46 billion US dollars, and the listing places include the Hong Kong Stock Exchange, the New York Stock Exchange, the Nasdaq and the Shenzhen Stock Exchange, with the number of 8, 5, 5, and 1, respectively, and the total number reaches a new all-time high. Nonetheless, is everything really fine for listed unicorns? Comparing the data before and after the listing, the reality is not so.
First, 40% of the companies suffered bankruptcy.
From the first day of listing, the issue price is too high, the market is not optimistic about its prospects, there is no breakthrough innovation, profitability model is doubtful and other factors, **** 7 companies on the first day of listing, the highest degree of breakage for the highest beeping mile up to 14.8 percent. In addition, in addition to the above reasons, due to foreign investors and the capital market on the domestic corporate culture, operating model, there is an understanding of the gap, compared to 10 companies listed in the U.S., the number of companies in the bankruptcy of the number of 4 accounted for 40%, accounting for the total number of bankruptcy of 57.1%.
Second, the market value is worrying, only 5 to realize the expected triple jump. From the market value point of view, more than 50% of the enterprise issue market value is higher than the expected valuation, which rose the highest for the e-commerce industry Pinduoduo, the main three or four lines of user groups, tapping into the demographic dividend, the issue of the market value of 12 times the valuation of the ex ante. However, in combination with the current market (December 31, 2018), only five enterprises have achieved continuous growth in market value; more than half of the enterprises have shrunk in market value, of which TouchPower Technology has suffered three consecutive drops in valuation, from the estimated valuation of $1.5 billion to the current $530 million, a reduction of up to 64.7%.
3 Challenges and Suggestions
3.1 Three major issues to be resolved: low tech content, low continuity of business operations, and birthplace limitations
China's unicorns have reached record highs in terms of both the number of newborns and the number of exits from IPOs, with the number of companies in all 15 sectors largely increasing compared to the previous period. The number of companies in each industry segment has basically increased, but the accompanying problems have also become more and more obvious. In addition to the most important capital challenges that all global unicorns need to face (see the next section for more details), Chinese unicorns need to face and solve three major problems when comparing to the international world, especially the United States.
First, the technology content is not high. Despite the good development of technology head enterprises, however, the overall growth of high-tech and high-end manufacturing enterprises is not fast, and it is difficult to shake the pattern of China's unicorns dominated by Internet companies. In terms of growth rate, comparing to the previous period, automobile transportation and healthcare are developing most rapidly, with an increase of 8 and 7 companies respectively compared to the previous period, but the technological content in the two types of industries is not high, and more than 50% of them are Internet-based companies. Among them, the automotive transportation industry by the new energy car-making impact, such as Xiaopeng Automobile, Ranger Automobile, Momenta and other new car-making forces and automated driving companies increased significantly, but accounted for only 43.5% of the total number of automotive transportation industry; health care industry is even worse, focusing on monoclonal antibody Fuhong HANLIN and focusing on the tumor immune autoimmunity of the sky territory of the biological two pharmaceutical R & D enterprises.
Second, included in the major development projects, such as big data, artificial intelligence and other industries, although the number of enterprises has increased, the proportion has declined, the development of these areas is not as fast as the unicorn's overall development speed. For example, the artificial intelligence industry **** 7, an increase of 1 over the previous period, but the proportion slipped 0.35 percentage points.
Second, the continuity of business operations is not strong. Unicorns are characterized by fast growth and strong outbreaks, but the development to a certain scale will fall into a bottleneck, breaking through the plight of sustainability is a problem that many unicorns need to face. Sustainability includes the maintenance and continuous output of corporate brand and cultural values, the convening of high-quality talents, the continuous optimization of the internal structure of the enterprise, the products or services more in line with the needs of the users, and the enhancement of quality and efficiency and the formation of profit. However, even if the famous head unicorns such as OFO and DDT are not able to y understand the needs of consumers and the development of the times, and make good planning by combining their own strengths after the subsidy slopes are retreated, it is very difficult to continue to maintain the advantage in the face of the fierce competition when the enterprise scale and valuation are raised by the abundant capital in the early stage.
Third, the birthplace is limited. Limitations are divided into two aspects, on the one hand, the breakout of second-tier cities, and on the other hand, the first-tier cities of the stubborn. From the industry distribution point of view, more than 50% of the unicorns in the country are concentrated in the five industries of entertainment media, automobile and transportation, e-commerce, financial technology and healthcare, which indicates that the unicorns have obvious strong industry attributes, and their births require mature and perfect industry chain supporting resources. Although Nanjing broke through this year, the rest of the provincial capitals and new first-tier cities are less developed than expected, how to revitalize the new economy and cultivate unicorns under the pressure of urban differences is an important issue that these cities need to consider. In addition, in the face of the challenge of the remaining cities, "North, Shanghai, Hangzhou and Shenzhen" need to consider how to continue to maintain the capital environment, talent attraction, support preferential policies, high-tech industry planning and other good entrepreneurial atmosphere.
3.2 Suggestions
Therefore, in the face of the above problems, from the perspective of the unicorn enterprises themselves, we need to consider the two aspects of operation and core competitiveness of the enterprise. In terms of operation, in the early stage of creation, pay attention to the impact of marketing on the enterprise, and effectively utilize new media social networks, investor promotion, summits, etc. to promote and expand brand influence. When exporting, pay attention to and cultivate your own brand and culture, establish effective communication and credit mechanism with customers, and deepen your understanding of consumer characteristics and needs to maintain market sensitivity. As the company matures, it improves efficiency and reduces costs to increase profitability, adjusts strategy periodically to optimize business structure, and attracts and cultivates talent to provide fresh blood for the company.
Core Competitiveness, for high-tech enterprises, in the era of digitization and data, pay attention to cloud computing, artificial intelligence and other technologies, and strengthen the investment in research and development to maintain the technological high ground; for other types of enterprises, highlight their own strengths, and differentiate themselves from their competitors through business model innovation, product innovation, and cross-border innovation to form a differentiated advantage. The company's differentiation advantage.
From the government's point of view, we need to support the development of the regional new economy with greater efforts. Referring to the Nanjing government, insisting on the organic combination of enterprise-led and government support, through such preferential policies as financial support, talent docking, talent subsidies, tax breaks, etc., and in the form of demonstration and precise services, we can help unicorn enterprises to solve the problems and issues encountered during their growth. The establishment of high-tech parks provides a high-quality innovation environment that promotes the dissemination and circulation of knowledge, technology, and talent among enterprises, universities, and the government, and combines the upgrading of traditional industries with the cultivation of new industries to promote the activation of the new economy in the region.
Appendix: China's unicorn list, China's newborn unicorn list (all sorted by valuation)
(Source: Zepin Macro)