The pace of billion-dollar startup creation slowed markedly in China in 2018’s final quarter as the country’s largest tech startups shored up their dominance and the economy decelerated.

China spawned 97 unicorns last year with a combined valuation of 1.2 trillion yuan ($178 billion) across sectors from consumer internet to online shopping and electric vehicles, according to a report published by consultancy Hurun. That’s about one unicorn born every 3.8 days. But of those, 11 were created in the December quarter, down from more than 30 in the previous three months.

Tech startup investment is slowing as stretched valuations and the economy takes a toll. Beijing, wary of financial risk, is cracking down on internet loan providers and the crypto-currency market is sputtering as prices deflate. Alibaba Group Holding Ltd. Vice Chairman Joseph Tsai warned last week that valuations were “distorted” and may decline over the coming six to nine months, particularly in over-heated arenas such as bike-sharing.

Minting Unicorns

Unicorns are far more common in consumer internet and online retail arenas

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Cryptocurrency miner Bitmain Technologies Ltd. topped the list of new billion-dollar startups with a price tag of 50 billion yuan, Hurun’s data showed. Internet lenders made up a chunk of the rest of the total value alongside electric car makers like XPeng Motors Technology Ltd. Hurun said 70 percent of the 24 unicorns that listed on public exchanges in 2018 saw their valuations rise after the float. But several high-profile debutantes, including smartphone maker Xiaomi Corp. and internet services giant Meituan Dianping, are trading well below their initial price.

Unicorn Sightings

China’s largest tech unicorns span industries from fintech and media to drones

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Unlike New York-based CB Insights, which compiles a global list, Hurun focused on China and counts spin-offs and subsidiaries of publicly traded corporations as unicorns, such as JD.com Inc.’s logistics division and Suning Finance – an arm of Alibaba-backed retailer Suning Commerce Group Co.

Sequoia Capital, Tencent Holdings Ltd. and IDG were the three leading investors in unicorns, while Beijing, Shanghai and Hangzhou housed the most. The 186 unicorns listed by Hurun were valued at a combined 5 trillion yuan. Tencent and arch-rival Alibaba have stepped up expansions over the past year, investing in or setting up businesses from the cloud to physical retail and entertainment.

Birthing Unicorns

A unicorn was born every three to four days in China and Hong Kong last year

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 Via Bloomberg