Tech war: China’s chip industry becomes key breeding ground for unicorns, report says
As start-up funding dwindles, investments are concentrated in a few unicorns, such as those in the integrated circuit sector
With fundraising becoming more challenging for start-ups across the board, China saw its number of newly funded unicorns – start-ups valued at over US$1 billion – drop from a peak of 192 in 2021 to 137 in 2022, and further to 106 last year, according to the China Unicorn Enterprise Development Tracking Report published on Sunday by Great Wall Strategy Consultants.
While total funding has dwindled, start-ups that were able to attract investors received more backing on average than in previous years. Most of it came from renminbi funds. Last year, US-dollar funds accounted for just 28 per cent of all fundraising deals, compared with 35.5 per cent in 2022 and 50 per cent in 2021, the report said.
A large part of the investments went to unicorns in hard tech industries such as ICs and new energy vehicles, according to the report, as the Chinese government doubles down on its self-reliance strategy aimed at reducing dependence on foreign technologies, particularly those from the US.
The Yangtze River Delta, China’s industrial heartland and a semiconductor production base, was home to 40 per cent of all Chinese unicorns in 2023, the report showed. In the past few years, more unicorns were founded outside first-tier cities like Beijing, Shanghai, Shenzhen, Guangzhou and Hangzhou.
