Yuan lifts domestic unicorns in first half

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Despite slowing global economic growth, Chinese unicorns — privately held startups valued at over $1 billion each — have demonstrated strong resilience and vitality, thanks to renminbi-denominated financing, experts said.

Chinese startups in the fields of new energy and artificial intelligence have emerged as crucial growth drivers, they said.

On Monday, Forbes China, the Chinese edition of the renowned US business magazine, released the list of the world's newest unicorns that emerged in the first half of this year. Out of 55 such unicorns, 23 are from China and 20 from the United States. The world currently has 1,653 unicorns in all.

Graham Earnshaw, chief strategy officer of Forbes China, said Chinese unicorns have not only endured the challenges posed by the COVID-19 pandemic over the past three years but emerged even more resilient than in the pre-pandemic period, once again surpassing their US counterparts in the first half.

He said Chinese unicorns' stable growth is proof of their resilience and ability to adapt to new environments. They neither expanded rapidly when the US Federal Reserve cut interest rates nor stopped growing when the Fed hiked rates.

Earnshaw said more Chinese unicorns are raising money in renminbi instead of US dollars. In the first half this year, more than 90 percent of Chinese unicorns used renminbi in their latest round of financing. Last year, in the latest round of financing for Chinese unicorns, over 70 percent of enterprises embraced the renminbi. In 2021, 65 percent of Chinese startups that sought funding raised money in renminbi.

Earnshaw said within sectors like clean energy, semiconductors, medicine and healthcare, startups that adopted the renminbi for the latest round of funding last year accounted for about one-fourth of new unicorns.

Prominent corporates have also helped fund many startups that went on to grow into unicorns, Earnshaw said.

Forbes China said the US still boasts the largest number (768) of unicorns, followed by China (394), Europe (269) and India (87).

Earnshaw said unicorns in new energy and AI now lead the overall unicorn space, a trend that started in the second half of last year.

According to Forbes China, last year, the world's seven largest fund infusions for unicorns in the new energy vehicle sector totaled 50 billion yuan ($6.98 billion). Six of them were in China and one in the US. Only two of the seven unicorns are automakers, while others are in the upstream of the EV industry chain where startups have been attracting more and more social and financial resources.

In the first half, more software companies serving EV manufacturers or firms related to the internet of vehicles became unicorns, Forbes China said.

A recent report co-released by data service provider IT Juzi and Aliyun, Alibaba's cloud computing subsidiary, said measures such as support for companies to list on the STAR Market of the Shanghai Stock Exchange and the ChiNext board of the Shenzhen Stock Exchange, have created more room for the development of technology startups.

The report said new unicorns that emerged in China in the first half are mainly in areas like integrated circuits, new energy and new materials.

Xiang Bing, founding dean and professor of China business and globalization at the Cheung Kong Graduate School of Business, said the emergence of new forces like unicorns in economic development has created more and better channels for young entrepreneurs and investors to contribute to social and economic development.

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