In the past few years, global unicorn companies have been almost divided by China and the United States. But the latest statistics show that in 2022, the situation has changed. According to Hurun Research Institute, in the first half of 2022, 138 new unicorn companies were added in the U.S., 14 in India and only 11 in China.
Incomplete statistics and research from Caijing Eleven show that the number of new unicorn companies in China in the second half of the year will be about 20–30. If measured in this way, the number of new unicorns in China will be around 40 in 2022. Previously, this figure was 156, 137, and 111 from 2018 to 2020.
Caijin writes that the change in the number of new unicorns reflects the rapid decline in investor confidence in the Chinese market, which stems from several key events.
The first is the consolidation of the education and training sector brought about by the “double reduction” policy in 2021. “With strong regulation, an industry can be extinguished overnight, and many investors will worry, will there be a next education sector?”
The second is the DiDi IPO in mid-2021. Didi is a representative company. Ant Financial, ByteDance, and Douyin have yet to been listed that also affect investor confidence. “The state of these companies reflects the challenges of dealing with regulation during a period of change.”
The third is the Shanghai epidemic closure in April 2022. The common sentiment among investors was that the closure and control period was the most depressed period for sentiment across the Chinese investment market.
The fourth key factor is the blocked access for Chinese companies to go public in the U.S. According to WIND data, Chinese companies raised a total of $582 million in U.S. listings in 2022, a decrease of approximately 96% from the annual amount raised in 2021. Public data shows that about half of the Chinese companies that went public in 2018 chose U.S. and Hong Kong stocks. In 2021 and 2022, that percentage drops to less than 20%.
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