Why Xiaomi’s Offering May Not Spell Trouble for Other Chinese Unicorns


Reasons to be confident: Ant Financial offers profitable internet services, but, unlike Xiaomi, they make up the vast majority of its business. Last month, it raised $14 billion in what was the biggest-ever fund-raising round by a private company, drawing upon investors like the investment firm Warburg Pincus and the sovereign wealth fund Temasek.

Reasons to be cautious: Ant Financial faces heavy regulatory scrutiny from Beijing, which has tightened its leash on the Chinese financial industry. And Tencent’s WeChat Pay is fighting hard to become a more competitive rival.

Tencent Music Entertainment

Tencent’s music arm is a significant part of its parent company’s empire. And it already has a lock on Chinese music listeners’ ears: The business controls more than 70 percent of that country’s market for music streaming, according to analysts at Citigroup.

Reasons to be confident: Again, Tencent Music actually is a fast-growing internet company. It has about 700 million monthly users, with news reports estimating that 15 million of those pay for the service.

Reasons to be cautious: By comparison, Spotify, its closest counterpart, has 170 million monthly users, but 75 million of whom pay. Tencent Music will need to convince investors that more people are willing to pay for its services.


The company, which was founded in 2010, offers food delivery, Groupon-like discounts and more. It’s now one of China’s most valuable tech start-ups, with a valuation of roughly $30 billion.

Reasons to be confident: Meituan-Dianping is still growing fast, having doubled its revenue last year to 33.9 billion yuan, or $5.1 billion. Tencent is one of its investors.

Reasons to be cautious? It’s worth noting that the company’s losses nearly tripled last year from the prior year, to $2.9 billion. And while it has a lead over rival offerings from Alibaba, it is unclear how long that will last.


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