China

Shanghai #8

"Shanghai has an abundant pool of innovative and high quality talent that is highly receptive to diverse ideas. There is strong demand for this talent from both startups and corporations."

Daryoush Ziai
CEO, Schindler China
#3 Global Ecosystem in Knowledge
#2 Asian Ecosystem in Talent & Experience
#2 Asian Ecosystem in Performance

Highlights

Shanghai may have centuries of culture behind it, but this Asian metropolis is looking to the future. Juniper Research ranked Shanghai as the world’s #1 Smart City for 2022, based on its transportation and infrastructure, energy and lighting, city management, technology, and urban connectivity.


As a global financial hub and location of one of the world’s busiest container ports, Shanghai is China’s gateway to the world. The city’s population of 24 million includes a large base of sophisticated and cosmopolitan consumers, as well as 250,000 expats. It is no surprise then that the city is a popular home base for foreign companies. Mercedes-Benz Group opened an R&D center in Shanghai in March 2022. The center, its second R&D facility in China, will focus on connectivity, automated driving, and big data. SMIC announced it will invest $8.87 billion to build a chip plant in Shanghai.


The Venture Capital World Summit was held in Shanghai in March 2022. MWC Shanghai, Asia’s most influential event for the connectivity industry, is scheduled to take place here in July. IEEE ICIT, one of the flagship conferences of the IEEE Industrial Electronics Society, will be held in the city in August. Non-profit Asian Association of Business Incubation (AABI) held its 2021 AABI Summit and Awards Ceremony in Shanghai in November 2021.


Notable recent funding rounds out of Shanghai include self-driving tech firm Zongmu’s ¥1 billion ($149 million) Series E, AI startup Pateo’s ¥300 million ($44.6 million) raise, and Mooe Robot’s ¥100 million ($14.9 million) Series B.

Ecosystem by the Numbers

TOTAL EARLY STAGE FUNDING
(2019H2-2021)
$4.5 bn
GLOBAL AVG.
$687 m
ECOSYSTEM VALUE
(2019H2-2021)
$250 bn
GLOBAL AVG.
$28.6 bn
MEDIAN SEED ROUND (2019H2-2021)
$1.6 m
GLOBAL AVG.
$671 k
MEDIAN SERIES A ROUND (2019H2-2021)
$10 m
GLOBAL AVG.
$4.7 m
SOFT. ENGINEER SALARY (2021)
$36 k
GLOBAL AVG.
$46 k
105 bn
GLOBAL AVG.
11.3 bn
222
GLOBAL AVG.
101
Amount ($)
Count (#)

Exits

(2017-2021)
EARLY-STAGE FUNDING GROWTH TIER (2018/19 VS. 2020/21)
1
Calculated on a scale of
1 (lowest) to 10 (highest)
TOTAL VC FUNDING (2017-2021)
$52 bn
GLOBAL AVG.
$4.5 bn
TIME TO EXIT (2017-2021)
10 years
GLOBAL AVG.
9.4 years

Sub-Sector Strengths

Gaming

Shanghai is developing into an esports center. Research from Shanghai Jiao Tong University ranked the city second in the world and first in Asia for esports. High-profile offline esports event Intel World Open was held in the city in January 2022. Los Angeles-based game developer Riot Games is opening a new studio in Shanghai. Mobile games developer Moonton was acquired by ByteDance for $4 billion in March 2021.

Healthtech

Shanghai is home to more than 240,000 healthcare professionals, and 18 of the top 20 global pharmaceutical companies have their China headquarters or research centers in Shanghai. The city’s 14th Five-Year Plan (2021-25) for the sector aims to grow biopharma-related manufacturing and establish six industrial parks. Simbay Park, a biotech-focused industrial park, is one of 12 municipal-level startup incubators in Shanghai. Biotech startup Igenesis raised a ¥100 million ($14.9 million) Series C in March 2022.

Reasons to Move Your Startup to Shanghai

Financial Incentives

Enterprises registered in Shanghai or that have set up regional headquarters in Shanghai receive a startup subsidy of ¥5 million ($743,000). The subsidy is paid over three years in three installments of 40%, 30%, and 30%. Eligible recognized regional headquarters are also granted a three-year rent subsidy equal to 30% of the total rent. Multinationals with regional headquarters in Shanghai and an annual turnover of more than ¥500 million ($74.3 million) are entitled to an additional lump sum incentive, again paid over a three-year period.

Global Connections

Long known as the Pearl of the Orient, Shanghai is a fashionable metropolis and major Asia-Pacific transport hub with excellent connectivity. Modern and international, it is one of the most open cities in China. Almost 700 regional headquarters of multinational corporations are located in the city. As well as being an international financial, trade, and shipping center, Shanghai is also a scientific and technological innovation center.

Selected Startup Organizations

Startup Genome
Partners

ChinaAccelerator
Ether Capital
Founder Space
Innoclub
Innospace+
Innospring
NakedHub
People Square
Shanghai valley
Sinavation Ventures
Startup Grind
Technode
Xnode

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