What does China’s unicorn heat map look like?

More than 80% of the top 50 unicorns we list offer their core business via the internet. E-commerce is the most prolific of the sectors, accounting for seven of the most valuable start-ups.

Another trio comes from the logistics sector, which is increasingly appreciated by investors, with JD Logistics and Alibaba’s logistic affiliate Cainiao ranking 4th and 6th.

Internet finance provides another batch of unicorns, including the fintech or private-sector banking units of the BAT and JD.com.

Besides shopping online, the Chinese have been spending more money on education and healthcare too, fuelling the rise of Yuanfudao, an online education service provider backed by Tencent. The Covid-19 outbreak highlighted the reach of remote learning – as was made plain in Yuanfudao’s latest funding round in October which valued the education platform at $15 billion (see WiC517). Two other edtech platforms and five healthcare firms also make the top 50 club.

Then there is the much-hyped artificial intelligence (AI) sector. Led by former Google chief Eric Schmidt, the National Security Commission on Artificial Intelligence has been warning repeatedly that China is on the verge of surpassing the US as an “AI superpower”. In its final report to the US Congress this week, it again urged Washington to do more to protect America’s position. “AI is going to reorganise the world. America must lead the charge,” the commissioners warned in their 756-page report.

Spearheading China’s challenge in AI will be the six unicorns in the top 50 list, including SenseTime and Megvii. Both have attempted to go public in Hong Kong but their plans were scuppered after Trump’s sanctioning of various Chinese tech firms saw both AI companies placed on the so-called US blacklist.

As Sino-US tech rivalry rages on, many Chinese regard the American sanctions as belated recognition of the high quality of their domestic champions. The underlying logic: only the most tech-savvy firms are deemed as a threat by the American authorities.

The field of artificial intelligence looks like being a fertile one for unicorns of the future. Although it is not on our top 50 list, Moore Threads, a start-up that makes graphics processing units (GPUs), claimed it had joined the unicorn club last month after raising “billions of yuan” within 100 days of its founding. Its claim to greatness is that its GPUs will play a key role in the AI era in applications like autonomous driving, Big Data and image recognition.