China has experienced rapid growth in the number of unicorn companies in recent years, prompting experts to call for increased support in light of funding challenges and limited experimental scenarios.
Currently, China boasts 372 unicorns, or startups valued at over 1 billion U.S. dollars, ranking first in Asia and second globally. At least 15 unicorn companies are distributed in seven sectors, including integrated circuits, clean energy, innovative pharmaceuticals, and power batteries, collectively accounting for 43.3 percent of the total.
Artificial intelligence and commercial aerospace remain financing hotspots, with newly financed enterprises in these fields accounting for more than 50 percent annually. These unicorns generally focus on core underlying technology research and development, with their patent numbers growing at an average annual rate of 30 percent, forming a virtuous cycle of research, application, and iteration.
"China has between 300 and 400 unicorn companies, exhibiting steady growth in quantity, expansion in regional distribution, concentration in leading cities, and a focus on hard technologies in sector allocation," said Yan Lingling, deputy director of enterprise competitiveness research office at the Institute of Science and Technology Standards under the China Center for Information Industry Development.
Experts say that the innovative practices of unicorn companies not only win them market competitiveness, but also drive the upgrading of upstream and downstream industrial chains.
However, as Chinese unicorn enterprises are transitioning from emphasis on quantity growth to a leap in quality, they continue to face challenges including the withdrawal of U.S. dollar-denominated funds, scarcity of patient capital, difficulties in venture capital exits, and obstacles to listing. In terms of application scenarios, domestic testing environments for new technologies and products remain limited, while expansion overseas encounters difficulties in adapting to foreign markets.
"We should expand the range of scenarios available for unicorn companies, encouraging larger enterprises to share their core business areas with unicorns, and facilitating the exchange of scenarios and data among unicorn companies," said Yan.
"We should encourage the development of patient capital and capital market, allowing these unicorns to secure the funding they need for healthier growth. We also need to further enhance regulatory governance in emerging business and industries to foster more internationally competitive sectors in China," said Wu Wensheng, chairman of the Great Wall Enterprise Institute.
Experts urge increased support for China's rapidly growing unicorns amid challenges
