From Copycats to Innovators: the rise of China’s Unicorn Companies

Abstract

Ant Financial, ByteDance and Didi Chuxing: these are the three most valuable unicorns in the world. According to Hurun Global Unicorn List 2019, a ranking of the world’s billion-dollar tech ‘start-ups’ founded in the 2000s and not yet listed on a public exchange, China has the world’s largest number of “unicorns”, 206 in total, compared with 203 in the US. But what does “unicorn” mean? Unicorn is not just a mythical creature famous for being represented as an horse with a horn on its head, but it’s also a term used in the venture capital industry and coined in 2013 by Aileen Lee, founder of a seed stage fund named Cowboy ventures, to describe privately owned startup companies that reach a 1$ billion dollars market value. Companies that managed to exceed such valuation are so rare, that finding one is like finding an unicorn. Besides providing an overview of the definition and characteristics of the unicorn companies, the aim of my thesis is to analyze the Chinese business development environment in order to understand what are the main drivers of these startups, identify the reasons of their success in the Chinese economic ecosystem, comparing it with that of different countries.