Top Asian Unicorns are down by 40% in private markets

Startup

In private transactions, Asia’s most well-known startups are trading 40% cheaper than six months ago, owing to a rout triggered by Chinese regulatory headwinds and the global economic slowdown.

According to AJ Patel, a senior member of Setter Capital’s venture capital secondaries team in Toronto, the affected billion-dollar companies range from financial technology and e-commerce to mobility and consumer.

Patel said, “We’re seeing very limited demand for some of the unicorns,” adding that bids are 25% to 50% lower than the companies’ most recent fundraising valuations. He refused to publish the names.

He further said, “There will be rounds down, or companies will reprice their stock lower for internal reporting,” Public mutual funds will reassess their portfolio for lower valuations” in the third quarter.

Asia attracted more than $1 trillion in venture capital money since 2012, according to researcher Preqin, which has backed valuations of companies including Byte Dance Ltd. and Shein. However, both are now trading at significant discounts.

Investors are looking for opportunities in North America because of concerns about China’s regulatory environment. The region accounted for 28% of the 1,170 private businesses valued at more than $1 billion, according to CB Insights’ Global Unicorn List. China alone is home to 174 unicorns, making it the largest base of such startups after the US.

Byte Dance’s valuation fell at least 25% to well below $300 billion, people familiar with the matter said last month. Buyers of Shein are evaluating offers 30% cheaper than its April valuation of $100 billion, people familiar with the matter said. A further decline may occur in the third quarter.

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