More Than Half the 124 Unicorns of 2017 are BAT Investments

After a chilling 2016, the capital markets became more rational in 2017. The overall trend remains unclear, but investors seem willing to back projects that show clear rewards. This has led to broad heavy investment, creating more unicorns than previous years. Many unicorns established in past years also went through several rounds of financing in 2017.

The unicorns have received more money and attention than ordinary companies in recent years. How are they developing now?

Chinese Internet Unicorn Club

As of December 31, 2017, 124 Internet companies were valued at more than $1 billion. The ones on the 2017 Chinese Internet Unicorn Club List have an overall value of $615.5 billion and average value is $4.96 billion.
There are 43 newcomers since the 2016 unicorn list, accounting for 35 percent, and 15 companies that have dropped off the list after an IPO, listing in New Three Board, acquisition, the demolition of the VIE (variable interest entities) or lack of funding.

Of the 124 unicorns, 50.8 percent of them have a direct or indirect equity relationship with Baidu, Alibaba and Tencent (BAT). Among the 11 “whale” companies valued at more than $10 billion, 10 are related to BAT. Only DJI still has no relevance with BAT.

Interpretation of Corporate Data

1. Valuation Pyramid Distribution: “whale club” valued at more than $10 billion is initially shaped.

Source: Translated by pandaily.

As seen above, valuations can be divided into five stages.

Three companies are valued more than $50 billion: Xiaomi, Ant Financial and Didi.

Xiaomi, which might go public this year, was valued as high as $100 billion in 2017. However, Xiaomi was in deep trouble in 2016: its handset sales plummeted and the overall volume of shipments slumped 40.5 percent. In 2016, the value of Xiaomi shrank from a peak of $45 billion to $40 billion.

The value of Ant Financial was $15 billion higher than in 2016, and it is now valued at $75 billion. After two rounds of huge financing in 2017, totaling $9.5 billion, the value of Didi reached $50 billion, up $16.2 billion from 2016.

There are eight companies valued between $10 billion and $50 billion, namely, Meituan Dianping, Toutiao, Cainiao, DJI, JD Financial, Lufax, CATL and Kuaishou.

Meituan Dianping completed a new round of financing worth $4 billion in September 2017, and is valued at $30 billion. Toutiao completed two rounds of financing, respectively, $1 billion D-round financing, and billions of E-round financing (allegedly $2 billion). Its latest valuation roared to $30 billion.

Lufax is valued $21 billion, and the valuation of Cainiao increased more than 150 percent than 2016.

CATL is the only Chinese enterprise that provides a power battery system to foreign passenger car companies. It has developed rapidly in recent years, and is valued as high as $19.6 billion.

DJI is a rare benchmark for start-ups. It is self-made, technologically advanced and has a global market and independent development. It is likely to become another “giant whale”. Its valuation was $12 billion in 2017, up $2 billion than that in 2016.

JD Financial has similar background with Ant Financial, but there is huge gap in its valuation. JD Financial is currently valued at $10 billion, with large room for growth, compared to Ant Financial, whose valuation is $75 billion.

A total of 12 companies are valued between $5 billion to $10 billion. Eleven of them are linked to BAT.
These unicorns are Passion for Change, WeBank, iQiYi, Lianjia,, Mobike, Koubei, Ofo, Weltmeister, NIO, UBTECH and WiFi Master Key.

WeBank and Koubei received investment from Tencent and Alibaba respectively. Lianjia received investment from Baidu and Tencent. ofo received investment from Alibaba, and Mobike from Tencent. Weltmeister and NIO received investment from both Baidu and Tencent. The shareholder of WiFi Master Key, Cheetah Move, received investment from Tencent, as did UBTECH. Among the 12 companies, only Passion for Change has no connection to BAT, and the majority of its shareholders are state-funded institutions.

Culture and Entertainment, E-commerce, Automotive Account for 41%

Source: Translated by pandaily.

In terms of industry distribution, companies that entered the list include 14 vertical industries. Eighteen companies are in the cultural entertainment field, accounting for more than 15 percent, which is in line with 2016 rankings.

The cultural entertainment and content industry targets the eyeball economy, which could reverse an economic cycle. This industry is more attractive to investors. It covers many subdivisions, such as (short) video, audio, live broadcasts, ticketing and animation, all of which were hot spots the past two years. This industry includes companies such as Toutiao, Kuaishou, Douyu, Bilibili and iQiyi.

The industry with the second most unicorns is the e-commerce industry, with 17 companies, which account for 14 percent. The rapid development of this area cannot be separated from consumption upgrading, clear trading models and abundant cash flow. Its industry dividend is still good. These 17 companies focus on women’s fashion, food and business to business e-commerce, community e-commerce, iron and steel e-commerce, home and building materials e-commerce, fresh food e-commerce, mother and infant e-commerce, cross-border e-commerce and secondhand goods.

Next is the car and transportation industry, which has 15 unicorns, accounting for 12 percent. This industry attracts numerous fund. Its subdivisions, such as shared automobiles, shared bicycles and new energy vehicles, were the focus of capital the past two years. For example, in the field of shared cars, Didi alone has already completed 16 rounds of financing, and in 2017, it received two rounds of financing worth $9.5 billion. Shared bikes were an investment opportunity in 2017. Particularly the financing war staged by the Mobike and Ofo sucked up billions of dollars. New energy vehicles were the birth of several unicorns. Weltmeister and NIO both attracted billions of dollars of financing in 2017. Singulato Motors, XPENG and CHJ Automotive are also unicorns in new energy vehicles.

Interestingly, these areas are where BAT were most eager to invest. The shareholders of Didi include BAT; Mobike and Ofo received money from Tencent and Alibaba; Weltmeister and NIO both received financing from Baidu and Tencent; and XPENG is an investment target of Alibaba. Automatic driving will be a huge industry, and there will be more unicorns.

Four new unicorns belong to the artificial intelligence field, including Face++, Sense Time, Mobvoi and Unisound. Another subdivision of corporate service is big data and cloud computing, with Kingsoft Cloud, Tongdun, UCloud and Chinac on the list.

Location distribution interpretation: 92 percent in Beijing, Shanghai, Guangdong and Zhejian, and 46 percent in Beijing

Source: Translated by pandaily.

Like 2016, the unicorns remain highly concentrated, only located in 9 provinces.

Beijing has 57 companies, accounting for 46 percent, 4 percentage points up than 2016, and ranking the first in number. Shanghai has 28 companies, accounting for 22 percent, 1 percentage point down than 2016, and ranking the second. Guangdong has 18 companies, accounting for 14 percent, 3 percentage points down than 2016, and ranking the third in number. Zhejiang has 13 companies, accounting for 10 percent, 1 percentage point down than 2016, and ranking the fourth in number. It can be seen that Beijing still has more unicorns than other places, especially in the field of cultural and entertainment. Shanghai and Zhejiang have more unicorns in e-commerce and finance than other places. And Guangdong has more unicorns in hardware than other places.

These four places have a total of 116 companies, accounting for 92 percent, basically the same as that in 2016. The remaining 8 companies are distributed in 5 provinces, Jiangsu, Hubei, Fujian, Chongqing, and Guizhou.

Correlation between Unicorns and BAT: more than half of unicorns are associated with BAT.

Association with BAT. Source:

In the list, 50.8 percent of the companies have a direct or indirect equity relationship with BAT. From the previous inventory, it is found that the higher the value is, it is more likely to be linked with BAT. Especially companies valued more than $5 billion, they are more or less related to BAT.

On the Unicorn List, 21 of the 23 companies valued more than $5 billion are linked with BAT, accounting for more than 90 percent.

As for the 11 unicorns entering the whale club (valued over billions of dollars), four have direct relationship with BAT. Ant Financial and Cainiao are subsidiaries of Alibaba. Lufax belongs to the Ping An Group, one of whose shareholder is Tencent. JD Financial is subsidiary of, whose first major shareholder is Tencent. And Xiaomi was invested by Yunfeng Capital, which is related to Alibaba.

In addition, among the small giants TMD (Toutiao, Meituan and Didi), some shareholders of Meituan and Didi are BAT. Toutiao is invested by Sina Weibo, and Alibaba owns more than 30 percent of Weibo shares. Kuaishou is invested by Tencent and Baidu, and CATL is invested by Yunfeng Fund. Only DJI is not related to BAT.

There are only 49 unicorns unrelated to BAT and remain independent, accounting for only 39.5 percent. As valuations grow, there is still a strong chance that they will be incorporated by BAT.

We have to admit that in the current era of entrepreneurship, it is bound to be tougher to stand up for independent growth.

Interpretation of VCs Behind the Unicorns: TOP3 are Sequoia, IDG, Qiming/ Matrix Partners

Sequoia is still China’s No.1 investment organization, with 32 unicorns, of which 14 are the new unicorns. Sequoia invested a considerable proportion of unicorns in A-round and B-round. IDG ranks the second. With extensive investment, and mass layout, it hits 24 unicorn. Matrix Partners, like what IDG does, invest 18 unicorns. And Qiming, similar as Sequoia, has invested 18 unicorns. These four VCs just represent the current two types of investment.

Unicorn growth: from the past, to the present, the future

Development Trajectories of 20 Typical Unicorns. Source: Translated by pandaily.

In the last chapter, we want share with you the past, present and future of the unicorns.

Based on the Unicorn’s valuation range, 20 typical unicorns are selected. Their financing time is the horizontal axis, and financing rounds is the ordinate. Totally, there are 20 curves as is shown in the figure.

In the above unicorn trajectory map, we try to remove those rich second-generation or giant business dismantling branch, but also need to take into account the entrepreneurial hot spots in recent years, selected such 20 companies.

They are Xiaomi, Toutiao, Didi, Meituan Dianping, DJI, Mobike, ofo, Douyu, NIO,, VIPKID, UBTECH, Sense Time, Face++, Yixia, Meicai, Himalaya, Kuaikan and Royole.


In the 2017, “anxiety” spread throughout the VC circle. Investors were anxious in searching for the next unclear opportunity, and unicorns were even more anxious. Unicorns were the brightest stars on the market, but now they face the same challenge and doubts. Most of these 124 unicorns are still unprofitable, and even don’t know their business models. It remains unclear what their future will be.

Entrepreneurship is like upgrade in games. Becoming a unicorn is just a milestone on the road, which represents only the past glory and Halo. If they do not create real value and profit, and return to the nature of business, unicorns will still face the risk of decline. The only way to be the best King in this game is to continue creating values.

This article originally appeared in Huxiu and was translated by Pandaily.