China’s President Xi Jinping, speaking during a group study session for members of the Politburo last Thursday, said that the country “must clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation”. Additionally, he stressed that blockchain would play “an important role in the next round of technological innovation and industrial transformation”.
While certain Chinese government officials have made comments and statements on blockchain in the past, Xi’s comments are likely the highest-profile public endorsement of blockchain technology for China to date. As it turns out, even as Xi called for more adoption of blockchain technologies in China, there are already hundreds of enterprise blockchain projects being developed in the country, led by some of China’s biggest industry players.
According to the Cyberspace Administration of China, which requires every entity developing blockchain technologies in the country to register with it for oversight, there were 309 such blockchain projects listed for the month of October alone. Some of the information gleaned from the list is that those currently involved in blockchain projects include some of China’s largest banks and commercial tech conglomerates, alongside many public sectors and government projects.
All four of China’s tech titans, Alibaba, Baidu, Tencent, and Huawei, are competing to see which one would be able to develop and provide China’s most advanced blockchain cloud services. According to registration data, all four tech giants have filed blockchain white papers that detail information about their blockchain cloud services as infrastructure providers for third parties.
Alibaba has been particularly busy in the field of blockchain, having filed 90 patent applications for projects that are focused on blockchain-related technologies. Tencent has been developing its own range of blockchain services as well, having filed registrations for its Tencent Blockchain and Tencent Cloud TBaaS Blockchain. As for Chinese search engine Baidu, some of its projects that were registered on the list include Token, which makes use of blockchain to protect intellectual property rights, and Baidu Blockchain Engine which is a cloud services provider. Baidu has also registered and patented its Super Chain, which is focused on providing foundational infrastructure for blockchain services.
On the trade finance and banking side, six banks including ICBC and Ping An Bank have registered a total of 14 blockchain projects. Industrial and Commercial Bank of China (ICBC), which is one of China’s big four state-owned commercial banks and the largest bank in the world by total assets, has registered two blockchain projects: ICBC Financial Services and ICBCXi Blockchain Service, which are projects aimed at improving and facilitating transactions for its clients and customers. Ping An Bank has adopted FiMax, a blockchain network, to improve security and privacy and increase efficiency in transactions and supply chain financing.
The Chinese government is also applying blockchain technologies to a variety of services, such as tax collection, matters of legal arbitration and land development use cases. Blockchain is innovating the legal landscape in China with the introduction of Internet courts. These courts are authorized to deal with a number of internet-related cases such as small loan contract disputes, online intellectual property disputes, and online financing, with all legal processes being conducted online. Both the Beijing and Guangzhou Internet Courts have registered their respective blockchain-based platforms. Some other examples of blockchain projects being utilized by the government sector include Cross-Border Transactions Platform for the State Administration of Foreign Exchange and Blockchain Electronic Invoice for the State Administration of Taxation Shenzhen branch.
Looking forward the number of blockchain projects to be developed and implemented in China is only going to grow at a tremendous rate. Blockchain technologies will play an important and crucial role in China’s industrial and technological innovation and transformation.
What do Beijing and Silicon Valley have in common?
More than two-hundred spawning billion-dollar unicorn companies, according to the latest report by Hurun Research Institute based in China that compiled the listed unicorn startups from around the world.
In this report, unsurprisingly, China and the United States took the top 2 spots with 206 and 203 unicorn startups respectively. Together, both countries account for more than 82 percent of the total unicorn count globally at 494.
Note that the report only considers unicorn companies that received the billion-dollar valuation as a snapshot in June 2019, and doesn’t take into account firms that have already been acquired or listed on the stock exchange board.
“We have found just under 500 unicorns in the world,” said Hurun Report Chairman and Chief Researcher Ruper Hoogewerf, who is also known by his Chinese name Hu Run.
“The Hurun Global Unicorn LIst 2019 is designated to inspire entrepreneurship among wannabe entrepreneurs and encourage investors. These young companies, only 7 years old on average, are the world’s most exciting startups, leading a new generation in disruptive technology.”
The top 3 highest valued companies being online payment systems Ant Financial (US$150 billion), content discovery platform ByteDance (US$75 billion), and taxi-hailing platform Didi Chuxing (US$55 billion).
This is followed by three unicorns based in the United States which are software cloud products Infor (US$50 billion), electronic cigarette company JUUL Labs (US$48 billion), and travel tech startup Airbnb (US$38 billion).
Of course, unicorns can be born anywhere, but why are the spotlights for these two countries in particular? Well, there’s the demographic and startup maturity factor, but ultimately it depends on the industries where investors are placing their bets on.
In China, the finance sector has produced the biggest unicorns, such as Ant Financial and JD Finance, a subsidiary of e-commerce giant JD.com.
Logically, these startups are successful in being supported by internet giants paired with the nation’s march to become a digital cashless society.
At the same time, with fintech growing massively and generating huge revenues for the country, this disperses into China’s ecommerce sector driven by the rapidly expanding number of online shoppers and changing purchasing culture.
In the United States, however, things are a bit different. While they have Amazon and Paypal, most of the current unicorns are corporation service provides, such as Infor Inc. a provider of enterprise software and service worldwide.
The country has a habit of paying for external corporation services, which will help improve their work efficiency and cut operation costs. Besides, the demand is not just locally, Chinese firms also prefer US corporation service providers over domestic companies.
In terms of venture capital firms, the report found the US venture capital firm Sequoia to be one of the most farsighted unicorns. It has invested in 92 of the 494 unicorns,
Meanwhile in second place is China’s internet giant, Tencent Holdings which also holds 46 investments and SoftBank which also has 42 counts of investment.
With just 21 startups valued at more than a billion dollars, you may think that India is way too far behind China and the United States.
Anas Rahman Junaid, the Chief Researcher of the Hurun Global Rich List had told Hindu BusinessLine that, “India can quickly catch up with Big 2, only if the regulatory and business environment is poised to capture the demographic dividend.”
What sets India apart from other hot startup ecosystems like Singapore or Indonesia is the country’s startups pace at entering the unicorn club.
As this report cuts-off at the end of June this year, it does not cover the four additional unicorns that were added to India between the months of July and September.
If you look at the timeline of Indian unicorns, it is the country’s time of harvest as it has long passed the first wave of startups in the country for those that took early-stage risks. And now with better infrastructure and smartphone penetration beyond metropolitan cities, the larger target area and demographic has also present large opportunities for startups.
With large exits like Flipkart which was sold to American retail giant Walmart for US$16 million, this has further boosted investors’ confidence and brought their focus to India.
Moving forward, it’s best we keep an eye out for India as well.
News came out as early as in September and now the Indonesian fintech company Ovo has officially confirmed its unicorn status, following a recent statement from Rudiantara, Indonesia’s Communications and Information Minister.
“I have talked with its founder, and it is indeed at over one billion. I dare to speak up about this after receiving direct confirmation,” Rudiantara told Antara News.
In the CB Insights report titled The Global Unicorn Club, the valuation of Ovo has reached US$2.9 billion as of March 14, 2019. This exceeds the valuation of Traveloka and Bukalapak, which has already held unicorn status.
It is also noted that even though the startup value is high, it is still recording losses.
But nevertheless, this achievement has made Ovo the country’s fifth unicorn after ride-hailing Go-Jek, online travel booking platform Traveloka, and e-commerce platforms Bukalapak and Tokopedia.
“We are very grateful for this since we have targeted five unicorns as of the end of 2019. Yet, we have managed to have a new one before the deadline is reached. We welcome Ovo as a new Indonesian unicorn,” said Rudiantara.
Since launching a digital wallet in September 2017, Ovo has established itself as the fastest-growing payment platform in Indonesia.
Backed by Lippo Group, Ovo started as a standalone payment app with an edge, being easily accepted throughout Indonesia in malls across Indonesia, ecommerce platform Matahari mall, homegrown coffee chain Maxx Coffee, cinema chains, retail stores and others.
Over 110 million people currently use Ovo which spread across 300 Indonesian cities. “We serve 98 percent of the adult population in Indonesia,” said Ovo’s chief executive officer Jason Thompson.
However, the major breakthrough for Ovo was their partnership with the two unicorns Grab and Tokopedia, as it became their official e-wallet and payment platform.
These deals elevated Ovo in the cashless race in Indonesia as it claimed 60 million users with Grab and another 80 million active users with Tokopedia. Leading the digital payments sphere against GoPay, the startup facilitates a massive amount of cash transactions in its platform which reaches trillions of rupiah each year.
“We see this landmark partnership as a validation of our strategy to enable payments for all Indonesian companies, both online and offline. Cash is a very difficult habit to break and consumers will only switch to cashless if it’s easier and safer than cash,” Ovo’s director of enterprise payments, Harianto Gunawan explained.
But certainly, having a unicorn status is not the end of the road for a startup. Recent reports of layoffs at Bukalapak and WeWork company crisis shows that it is never as easy as it seems to balance between profitability and growth.
When asked about the startup’s strategy moving forward, Sinta Setyaningsih, Ovo’s Head of Public Relations said that “we are still developing and the development of Ovo is still inseparable from cooperation with two unicorns, Grab and Tokopedia.”
He also added that the Lippo Group’s digital payment will continue to focus on encouraging Indonesia to increase financial investment as well as continue to serve the Indonesian people with other products and services.
With less than three months to go in 2019, there are still chance for Indonesia to exceed their pre-set target.
“I pinned high hopes that the target will be exceeded since there are more potential unicorn startups for this year,” Rudiantara added, hinting that these companies may come from the education and health sector.
“Logically, 20 percent of the national budget has been allocated for educational purposes, while five percent is for health. So how could it be possible, if there are no unicorns from both sectors,” Rudiantara said.
There’s some good news despite the slowing global economy as Google, Temasek, and Bain & Company has recently released its “e-Conomy SEA 2019” report that now values Southeast Asia internet economy at US$100 billion.
The 65-page report is the fourth in a series of annual reports published by internet giant Google and Singapore’s sovereign wealth fund Temasek since 2016 where the region has well over double its initial US$32 billion value.
For one reason, there are currently 360 million internet users across the Southeast Asia region who are taking up online shopping or banking and embracing ride-sharing and food delivery services – presenting a huge opportunity with the SEA internet economy.
According to the e-Conomy SEA 2019 report, “this pace of growth has exceeded expectations. Internet access is now affordable for large segments of the population and consumer trust in digital services has improved significantly.”
It is even noted that the region’s internet users display the world’s highest mobile engagement rates, with users from Malaysia, Indonesia and the Philippines leading the pack with four hours of daily usage (The global average is 3 hours and 13 minutes).
On the other hand, this valuation is also a result of the region’s increasing funding, especially for ride-hailing unicorns Grab and Go-Jek which have raised more than US$2 billion each in their effort to build a super app and dominate the ride-hailing market.
At the same time, Southeast Asia’s aspiring unicorns, which refers to startups with a valuation close to US$1 billion, have also been rounding up funds as much as US$1.1 billion within the first half of 2019.
In fact, more than US$37 billion has been invested in Southeast Asian online companies over the past four years make it home to 11 unicorns and a growing portfolio of aspiring unicorns.
Among them, the report has identified 70 aspiring startups in the region that are earmarked as a potential unicorn. The list includes Malaysia’s iFlix, Indonesia’s Halodoc, Vietnam’s Tiki, and Carousell from Singapore, among some.
Most of the startups identified were from the ecommerce industry that was valued at US$38 billion, growing seven times from the US$5.5 billion valuations in 2015. It covers online retail, digital marketplaces, and online groceries which has so far recorded on average five million orders submission daily.
Meanwhile, substantial growth is also seen in ride-hailing over the course of four years as there are also five times more people who use ride-hailing services now, up from eight million in 2015 to 40 million this year.
“In these few years, e-commerce and ride-hailing have become an integral part of daily life for millions of Southeast Asians, especially those living in big cities. They offer convenience, value, and access to services and products that were previously difficult to obtain,” the report noted.
With this, it seems that investor confidence in the region and startups remains healthy and strong. To this end, we may see more potential unicorns manifest soon.
India now welcomes its eighth unicorn this year as Rivigo hits a valuation exceeding a billion dollars with the US$4.9 million funding from South Korea fund and KB Platform Fund, the investment arm of South Korea-based KB Financial Group Inc.
KB Global operates a fund size of US$190 million with a 40 percent allocation of its portfolio to Korea startups, with a primary focus to invest in fintech and biotech startups in Southeast Asia, The fund also invested in Singapore’s ride-hailing Grab earlier in July this year.
The news was confirmed according to the regulatory filings with the Ministry of Corporate Affairs which sees a total of 1,263 cumulative convertible preference shares (CCP) shares allotted to the KB Global Platform fund.
With this investment, Rivigo’s valuation is now at US$1.05 billion, from the US$950 million it was valued in February last year when it raised US$50 million from SAIF Partners and private equity major Warburg Pincus.
As a matter of fact, Rivigo has been out to raise fresh capital for more than a year now.
Based on a report by Mint in September 2018, the startup has been in talks to raise US$400 million for its Series E round to further strengthen its technology and network coverage, which is a key game changer for the larger logistics market in the country.
However, according to present developments, the startup has failed to meet the target and has only been received top-up investments by existing backers SAIF and Wrbug who made the US$65 million in July this year.
Launched in 2014, Rivigo uses a relay trucking model, under which a truck driver hands over the vehicle to another driver at a designated pit stop. This avoids long journeys for truck drivers, which are only behind the wheel for a maximum of four to five hours stretch while making sure that the truck is not idle at any point of the journey.
With a fleet of 3 000 trucks, Rivigo currently offers its transport services across ten industries, which includes clothing, eCommerce, automotive, frozen and processed foods, fast-moving consumer goods, and automobiles.
Adding up to the momentum, the Gurugam-based startup has also recently launched the National Freight Index (NFI) in order to bring transparency to the largely unorganized logistics space.
Gazal Kalra, the Co-founder of Rivigo said, “the amount of AI and blockchain you can use in logistics is unparalleled. We generate so much data, something as simple as driver routing can be made much more efficient with machine learning and AI.”
With this, there are now a total of 25 unicorns found in India. Other unicorns that emerged in 2019 also include:
Interestingly, this comes at a time when India’s economy is on a growth slowdown, and apparently the worse in these six years according to India Today.
But still the great news is that it seems like the country’s unicorn club is growing faster than ever, especially when you consider its unicorn count from 2018 where it has produced 15 unicorns, that’s 22 unicorns in two year.