In 2022, unicorn companies, privately valued startups exceeding US$1 billion, encountered challenges as global institutional investors grew hesitant to finance them. Investment in emerging sci-tech firms in 2022 dropped by 35 percent year-on-year, causing the growth of unicorn firms to more than halve. Investment in startups in China plunged by 52 percent in 2022, which was particularly bleak with only one, Horizon Robotics, financed above US$1 billion. With their overestimated valuations and complex stock rights, Chinese unicorns are difficult to sell, so they turn to IPOs instead. Amid staff downsizing, conglomerates like Tencent and Xiaomi face pressure to expand investments. Despite the overall decline in investment, institutional investors remain active, shifting focus from unicorns to smaller startups, maintaining extensive financing engagement.
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