At a Glance:
China vs. U.S. Internet

Although China’s internet penetration is just over 50%, its sheer scale means that there are 3x the number of smartphone users and 11x the number of mobile payment users in China than in the U.S.

China vs. U.S.
Top Players for Key Verticals

Top Chinese
Startup Cities

Beijing is the country's top startup city based on valuation, followed by Hangzhou, Shanghai and Shenzhen.

Source: China Money Network

Top Chinese
Internet Players

Company CEO Selected Investors Listed on Market Cap/
Valuation (US$)
Alibaba Daniel ZHANG G Squared, Vulcan Capital, Softbank, Goldman Sachs NYSE: BABA 492.4B
Tencent Pony MA Naspers, IDG Capital Partners, PCCW HKG: 0700 479.6B
Ant Financial Eric JING Alibaba Group, NSSF, CDIB, CCB International Private 150.0B
Baidu Robin LI ePlanet Capital, IDG Capital Partners, Google, China Equity Venture TDF NASDAQ: BIDU 87.8B
Lufax Gregory D GIBB CICC, COFCO, Arbor Ventures, BlackPine Private Equity Private 60.0B
JD LIU Qiangdong Hillhouse Capital Group, Capital Today, Tiger Global Management NASDAQ: JD 56.6B
Didi Chuxing CHENG Wei Alibaba Group, Softbank, Tencent Holdings, Ping An Private 55.0B
Xiaomi LEI Jun All-Start Investment, Morgan Stanley, Shunwei, YF Capital, Qiming Ventures Partners Private 47.9B
NetEase DING Lei SoftBank Capital, Capital Today NASDAQ: NTES 34.3B
Qihoo 360 ZHOU Hongyi Sequoia Capital, Matrix Partners, IDG Capital Partners SHA: 601360 28.7B
Meituan Dianping WANG Xing Sequoia Capital, Google, Tencent, IDG Capital Partners Private 31.8B
Toutiao ZHANG Yiming Sequoia Capital, SIG China, Sina Weibo Private 28.6B
Tencent Music Group Cussion PANG NA Private 25.0B
TAL Group ZHANG Bangxin Tencent NASDAQ: TAL 21.6B
Sina Weibo WANG Gaofei Alibaba NASDAQ:WB 20.2B
Suning ZHANG Jindong Alibaba SHE: 002024 18.5B
DJI Frank WANG Sequoia Capital, Accel Partners, LH Capital Management Private 15.0B
Momo TANG Yan Stonebridge Capital, Matrix Partners, Alibaba NASDAQ: MOMO 9.5B
China Literature WU Wenhui Tencent HKG: 772 8.9B
Giant Interactive Group LIU Wei SIG China Private 7.7B

Source: Crunchbase, ITjuzi, Zero2IPO. As of July 9, 2018

Top Chinese
Startup Exits (IPO)

Company CEO/Founder Listed on Market Cap/
Valuation (US$)
Xiaomi LEI Jun HKG: 1810 47.9B
iQiyi GONG Yu NASDAQ: IQ 13.5B
China Literature WU Wenhui HKG: 0772 11.8B
ZhongAn CHEN Jin HKG: 6060.HK 11.0B
Qudian LUO Min NYSE: QD 7.9B
Ping An Good Doctor WANG Tao HKG: 1833 7.4B
Yixin Group ZHANG Xu-An HKG:2858 6.5B
Sogou Xiaochuan WANG NYSE:SOGO 5.1B
Best Express Shaoning Zhou NYSE: BSTI 4.2B
Paipaidai ZHANG Jun NYSE: PPDF 3.9B
Jianpu.ai YE Daqing NYSE: JT 3.3B
Bilibili CHEN Rui NASDAQ: BILI 3.2B
Huya TV LI Xueling NYSE:HUYA 2.4B
LEXIN XIAO Wenjie NASDAQ: LX 1.8B
Rise Center SUN Yiding NASDAQ: REDU 913M
G-bits SU Huazhou SHA: 603444 870M
Longshine XU Changjun SSE:300682 678M
hexindai.com ZHOU Xinming NASDAQ: HX 500M
China Rapid Finance WANG Zane NYSE: XRF 350M
SECOO LI Rixue NASDAQ: SECO 333M

Source: Crunchbase, ITjuzi, Zero2IPO.
From Jan 2017 to Jun 2018.

Notable Chinese
Startup M&A

Company CEO/Founder Acquired by Amount of Acquisition (US$)
Ele.me ZHANG Xuhao Alibaba 9.5B (1)
Mobike HU Weimei Meituan-Dianping 2.7B
Cheyipai YANG Xuejian Souche 1-2B
Dangdang LI Guoqin HNA Group 1.1B
Waimai(Baidu) GONG Zhenbin Ele.me 800M
Tantan HAN Zhibai Momo 600M
Tian Tian Express XI Chunyang Suning Commerce Group 472M
Lagou.com MA Delong 51job 119M
Hellobike YANG Lei Youon Bike Undisclosed
Maoyan WANG Xing Enlight Media Undisclosed
Kanche.com WEI Zheng Yixin Group Undisclosed
Bluegogo HU Yufei Didi Chuxing Undisclosed
FaceU GUO Lie Toutiao Undisclosed

(1)$9.5B is the enterprise valuation of Ele.me;
Alibaba and Ant Financial owned 43% with Alibaba
acquiring the remaining shares.
Source: Crunchbase, ITjuzi, Zero2IPO.
From Jan 2017 to Jun 2018

Most active Chinese
Venture Capital Firms











Source: Crunchbase, ITjuzi, Zero2IPO.
From Jan 2017 to Jun 2018

1.
The Chinese Internet
Giants are doing everything

Whether it’s building, investing, or acquiring, Baidu, Alibaba, and Tencent are present across the internet ecosystem.

baidu
alibaba
tencent

2.
China Internet Empowers Rural Population

The number of rural internet users in china reached 209 million in 2017 with a penetration rate of 35%.

Source: CNNIC, China National Bureau of Statistics

The internet has contributed significantly to the development of ecommerce, education and media in rural China.

Sources: Alibaba, QuestMobile, State Council Leading Group Office of Poverty Alleviation and Development, Ministry of Education, Research Institute of Rural Education at Northeast Normal University

3.
China’s Internet Companies
Embrace New ‘Social+’ Model

Chinese ecommerce companies have adopted a Social+ model where their business is anchored by a social pillar that drives user engagement and growth.

Sources: SCMP, 36kr

Ecommerce platforms aren’t the only ones who have adopted the Social+ model though… other verticals such as media and education have incorporated these social elements into their business model.

Sources: SCMP, Nasdaq

4.
Government
Is The Visible Hand

Success or failure in China’s internet landscape, especially media or fintech, is contingent upon government authority.

Sept 2017:
Cryptocurrency exchanges and initial coin offering banned by the government.

Dec 2017:
China’s central bank and regulatory commission tightened rules around internet financing and peer-to-peer online lending, wiping out smaller players. The last three years have seen the number of P2P companies shrink from 6,000 to 2,000.

Feb 2018:
17 online quiz app makers were halted by the State Administration of Press, Publication, Radio, Film and Television and told to clean up their act.

March 2018:
Beijing cyberspace authorities ordered Zhihu, ‘China’s Quora,’ to delist from all app stores from March 2 to March 9 due to their inefficiency in purging “illicit information” on the platform.

April 2018:
China’s media regulator ordered news aggregator Toutiao and live-streaming app Kuaishou to clean up content on their platforms, singling out both platforms for disrupting order in the online media industry.



Sources: SCMP, Abacus, Sina

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