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Startups

China overtakes US with highest number of tech unicorns: report

Along with India and UK, the four countries account for 89% of 494 startups

An advertisement for Tik Tok, a mobile app that allows users to post videos of themselves. The app was created by Beijing Bytedance Technology, the second-biggest unicorn in the world.   © AP

SHANGHAI -- China is home to the greatest number of technology startups each valued at $1 billion and over as of June 30, as government policies and venture capitalists hoping to find the next Alibaba Group Holding foster a nurturing environment for such companies to grow.

China with a total of 206 companies had three more such companies than the U.S., with Ant Financial topping the list with a market value of $150 billion, according to data compiled by Shanghai-based Hurun Research Institute. Hurun compiles a quarterly list but released an annual list for the first time on Oct. 21.

Along with India and the U.K., the four countries account for 89% of a total of 494 unicorns with an average value of $3.4 billion.

Rupert Hoogewerf, Hurun chairman and chief researcher, said the companies were seven years old on average and represented the world's most exciting startups offering new disruptive technologies.

"The rest of the world needs to wake up to creating an environment that allows unicorns to flourish in," said Hoogewerf.

The second biggest company by market valuation is media conglomerate Beijing Bytedance Technology with $75 billion, while ride-sharing operator Didi Chuxing is third with $55 billion.

Cloud computing services operator Infor, ranked number four with $50 billion, leads five other U.S. startups in the top 10 ranking. They include e-cigarette maker JUUL Labs, Airbnb and Space X, an aerospace manufacturer controlled by Elon Musk, CEO of Tesla.

E-commerce and financial technology companies dominate the list, but some consumer-focused companies also made the cut, including America's Zume Pizza, which is valued at $2 billion and uses robotics and artificial intelligence to bake and deliver pizzas.

E-paymaster Paytm led 21 of the companies from India, while BenevolentAI, a drug manufacturer is one of 13 companies from the U.K., more than France and Germany combined. Indonesia's Go-Jek and Singapore's Grab are two of the Southeast Asian startups that made it onto the list.

Most of the Chinese startups on the list are spinoffs from established companies. For example, Ant Financial is the financial arm of Alibaba, China's most valuable company by market capitalization, while Lufax is a $38 billion fintech controlled by Ping An Insurance, the country's biggest insurer by market value.

These companies, including Youdao, an online education platform bound for listing in New York and WeDoctor, a health care mobile app are part of an ecosystem created in recent years under the country's Made in China 2025 strategy to catch up with developed economies in science and technology.

Keen investors include Sequoia Capital of the U.S. and Japan's SoftBank Group, even though there are signs that funding for Chinese startups is beginning to decline.

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