Beijing city authorities take steps to support tech unicorns, including fast-tracking IPO approvals

The municipal government of Beijing has proposed a series of measures to tackle the “urgent needs” of the country’s technology unicorns, helping them to prepare for domestic and overseas public listings, as authorities switch from regulatory scrutiny to growth promotion amid a sputtering economic recovery.

Eleven Beijing municipal agencies across various functions, including the technology promotional agencies, the development and reform commission, and the finance and market regulation bureaus have joined hands to lay out what they are calling the “Ten Measures for Unicorns”.

A unicorn is the term used to describe a start-up company with a value of over US$1 billion. Notable unicorns from China currently include TikTok-owner ByteDance, fast fashion firm Shein and Hangzhou-based WeDoctor.

US VC firm BlueRun’s China arm ditches Silicon Valley brand, following Sequoia

The wide-ranging policy package is aimed at helping unicorns with talent acquisition, marketing, innovation, fundraising and public listings, among other issues, according to a statement published on the official website of the Beijing Municipal Science and Technology Commission last Friday.

City authorities will push for cross-agency collaboration to unearth more tech unicorns, especially those operating in “core technology”, connecting them with various market and technological resources to foster innovation. Preferential policy support will include a more “tolerant and cautious” regulatory environment.

A significant focus will be the facilitation of public listings by unicorns in domestic and overseas stock markets.

According to a report by market research firm Greatwall Strategy Consultants, there are currently more than 357 unicorns in China founded in the past 10 years.

The measures also include generous financing options, such as up to 100 million yuan (US$13.7 million) in financing for firms undertaking “projects of national strategic importance” on original innovation and key technologies. This also covers a mix of “venture debt and direct investments” through tie-ups between financial institutions and venture capital (VC) funds, providing them with much-needed “long cycle and low cost” financial help at a time when venture capital flows to China are down.

A recent report by investment research firm Preqin showed that China-focused VC funds raised US$2.7 billion from April to June, a plunge of 54.2 per cent from the previous quarter. This comes at a time of increased geopolitical tensions between the US and China, which has seen Washington impose sanctions on various Chinese tech firms.

To help unicorns explore a bigger pool of clients to drive sustained growth, Beijing authorities will encourage state-owned enterprises and industry-leading firms located in the city to open their doors to them. This is aimed at fostering “professional and regular” meetings to discuss business opportunities.

City authorities will also provide computing power support for artificial intelligence (AI) firms, a strategic technology industry that China and the US have recently locked horns over. Beijing is home to more than one-third of the country’s total number of core AI companies, as of October last year.