US, China lead number of unicorns in Global Unicorn Index 2020

By Patricia B. Mirasol

The world has 586 known unicorns—startups valued at more than US$1 billion—and the US and China account for 79% of them, according to Hurun Research Institute’s Global Unicorn Index 2020 released this August. The 586 unicorns are based in 29 countries and 145 cities. The total value of all known unicorns is US$1.9 trillion, close to Italy’s Gross Domestic Product (GDP).

“The US and China continue to dominate… despite representing only 40 percent of the world’s GDP and a quarter of the world’s population,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report, a luxury publishing group based in Shanghai, China. “The rest of the world needs to wake up to providing an ecosystem that allows unicorns to flourish.”

The Hurun Global Unicorn Index ranks the world’s startups founded in the 2000s, that are worth at least a billion dollars and are not yet listed on a public exchange. The valuations are a snapshot of March 31, 2020.

WHERE UNICORNS RESIDE
The US leads China 233 to 227 in terms of number of unicorns per country, but China is home to four of the top five unicorns:

1. Alipay operator Ant Group, the digital financial services arm of Alibaba Group Holding, valued at US $150 billion

2. ByteDance, owner of video-sharing platform TikTok, valued at US$80 billion

3. Didi Chuxing, China’s biggest ride-hailing services provider, valued at US$55 billion

4. Lufax Holding, which runs an online wealth management and peer-to-peer lending platform, valued at US $38billion

5. Space Exploration Technologies Corp, also known as SpaceX, valued at US$36 billion—SpaceX, owned by Elon Musk, is the lone unicorn in the top five that is based outside China (its headquarters are located in Hawthorne, California)

The UK placed third with 24 unicorns, while India was fourth with 21, and South Korea fifth with 11.

By city, Beijing is the world’s unicorn capital with 93, ahead of San Francisco’s 68 and followed by Shanghai (47), New York (33), Shenzhen (20), and Hangzhou (20). Nine of the top ten cities with unicorns are in China and the USA. London is the only other city in that top ten. “China and the USA dominating the world’s unicorn cities is significant because these unicorns create an ecosystem of talent and investors,” Mr. Hoogewerf said.

By region, Silicon Valley takes top spot as home to 122 or 21% of the world’s unicorns.

By continent, Asia leads North America (278 versus 236) as the continent creating the most unicorns in the world, both in terms of number of unicorns and in terms of total valuations of unicorns.

NUMBERS BY SECTOR
Eighty percent of the world’s unicorns sell software and services, led by e-commerce and followed by fintech, artificial intelligence (AI), and Software as a Service (or SaaS, a licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted). Twenty percent have a physical product as a core business offering, led by consumer goods, e-cars, and AI.

E-commerce was the sector with the most number of unicorns (89), followed by AI and fintech with 63 each. Others include SaaS (53), shared economy (33), and health tech (28).

The sectors most disrupted by unicorns are financial services, retail, media and entertainment, business management solutions, and healthcare. “Unicorns create value mostly by disrupting existing industries,” said Mr. Hoogewerf.

On the investor side, US-based Sequoia was the world’s most successful, investing in one in five of the world’s unicorns. Also successful at finding and investing in unicorns were China’s Tencent, Japan’s Softbank, and IDG (another US firm).