unicorn: Asian unicorns are trading 40% cheaper on private markets

Asia’s best-known startups are trading 40% cheaper than six months ago in private deals amid a rout triggered by Chinese regulatory headwinds and the global economic slowdown.

The billion-dollar companies affected range from fintech and e-commerce to mobility and consumer, according to AJ Patel, a senior member of the venture capital secondaries team at the consultancy Setter Capital based in Toronto.

“For some of the unicorns, we’re seeing very limited demand,” Patel said, adding that offers to buy are 25% to 50% lower than the companies’ latest fundraising estimates. I refused to divulge the names.

Asia has attracted more than $1 trillion in venture capital since 2012, according to researcher Preqin, bolstering the valuations of companies such as ByteDance ltd. and Shin. Yet both are now trading at deep discounts. Investors are looking for opportunities in North America due to concerns about China’s regulatory environment, Patel said.

The region accounted for 28% of the 1,170 private companies worth more than $1 billion, according to global CB Insights Unicorn listing. China alone is home to 174 unicorns, making it the largest base for such startups after the United States.

ByteDance’s valuation has fallen at least 25% to well below $300 billion, people familiar said last month. Shein’s buyers are pricing the deals 30% cheaper than its $100 billion valuation in April, people familiar have said. The third quarter could see further declines.

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“There will be declines, or companies will reprice their stocks lower for internal reporting,” Patel said. “Public mutual funds will redefine their portfolio at a lower valuation” in the third quarter.

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