Research: 97 startups attained a unicorn status in China in 2018, bringing the total number of unicorns to 186, with a combined estimated valuation of ~$736B
Jane Zhang / South China Morning Post :
Context & Ripple Effects
This research lands at the peak of a funding cycle: Crunchbase had already flagged 2018 as on pace to break records by August, with over $73B invested globally in seven months, and the full-year figure later came in at $139B raised by unicorns. Within that surge, China's cohort was outpacing everyone — by October the Wall Street Journal reported Chinese unicorns had surpassed the US in number while flagging growing government scrutiny and the retrenchment of startups like Ofo.
The 97 new Chinese unicorns and ~$736B combined valuation are therefore a high-water mark, not a baseline: the following year only 22 Chinese startups joined the club versus 78 from the US, as total unicorn funding fell to $85.1B. The gap between 2018's headline and 2019's cooldown is what makes this dataset worth reading closely.
First-order effects
- Ninety-seven Chinese startups crossed the $1B threshold in a single year, and their backers' markups now depend on valuations set during the same record funding run that pushed global unicorn investment past 2017's levels.
- Companies like Ofo show the downside of that cohort: rapid paper valuations colliding with cash burn and, per the Journal's reporting, increased government scrutiny.
Second-order effects
- The 2019 data confirms the reversal was sector-wide, not company-specific — China's new-unicorn count fell to 22 against the US's 78, shifting the marginal dollar back toward American startups after Chinese unicorns had overtaken the US in count.
- Investors who priced 2018 deals off momentum face a repricing environment, since the same Crunchbase series shows total unicorn fundraising dropping from $139B to $85.1B the following year.
Third-order effects
- If the pattern holds, unicorn counts track funding cycles rather than steady-state innovation, meaning headline tallies like this one are lagging indicators of capital availability — a dynamic visible again when creation rebounded past 163 in 2020 to 166 by May 2021 alone.
- China's response to the private-capital cooldown points toward structural substitution: state media later announced three venture funds of over $7.1B each targeting early-stage hard-tech startups, suggesting Beijing replacing some cyclical private funding with directed state capital.
The trend: Unicorn creation moves in funding-cycle waves rather than linear growth, and China's 2018 peak marks the moment its cohort began rotating from consumer startups toward state-backed hard technology.