China

Shanghai #8

Shanghai has a very impressive mix of global corporate innovation, startup co-working and investment hubs that helps startups connect dreams to innovation, make ideas to reality.

Howard Wang
Incubation Director, Shanghai Caohejing Innovation Center
#2 Global Ecosystem: Knowledge
#3 Global Ecosystem: Performance
Top 10 Global Ecosystem: Talent

Highlights

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. Its startup ecosystem is particularly strong in the fintech, gaming and ecommerce subsectors. Shanghai was home to 42 unicorn companies worth more than $1 billion as of the end of last year. Despite its historical strengths the Shanghai ecosystem was already facing a funding crunch when it was hit hard by the coronavirus crisis in early 2020. Startups in the city raised just $7.5 billion in the first quarter of last year. However, thanks to China’s success containing the outbreak, combined with a gusher of funding from the central bank to get the economy back on track, investment shot back up $13.2 billion and $12.2 billion in the next two quarters. In the final quarter of 2020, Shanghai was home to three of Asia’s top 10 largest funding rounds, a $735.85 million Series B for electric car company Enovate motors, a $315 million Series E round for industrial parts e-commerce platform Zhenkunhang, and $310 billion for early-stage biotech startup LianBio. Online medical care and remote learning companies have been particularly hot thanks to the impact of Covid-19.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
$5.1 bn
GLOBAL AVG.
$548 m
ECOSYSTEM VALUE
$157 bn
GLOBAL AVG.
$13.68 bn
MEDIAN SEED ROUND
$1440 k
GLOBAL AVG.
$480 k
MEDIAN SERIES A ROUND
$4.7 m
GLOBAL AVG.
$3 m
SOFT. ENGINEER SALARY
$37 k
GLOBAL AVG.
$44 k

Sub-sector Strengths

Edtech

In response to the pandemic the number of online learners in China shot up last year, reaching 423 million by March 2020, an increase of 110.2% from the end of 2018. The Edtech sector boomed too, reaching USD $70.40 billion in 2020, a 12.3% increase from the previous year. Shanghai-based education company Zhangmen raised USD $400 million in October 2020, while Zhangmen, another Shanghai-based company in the subsector, reached unicorn status last year.

Gaming

China boasts a massive domestic market of over 600 million gamers, while Shanghai recently broke ground on The Shanghai International New Cultural and Creative E-sports Center, a $898.2 million, 500,000 square meter e-sports event hub where teams and companies can be based and compete. The city also hosted the ‘League of Legends’ world championship last year, cementing its status as a global leader in e-sports. Shanghai-based game developer Moonton was acquired by ByteDance for $4 billion in March 2021.

Reasons to move your startup to Shanghai

Government Funding

In partnership with state-owned investing parties like Shanghai International Trust, Shanghai International Group, Shanghai Zhangjiang Hi-Tech Development, and the Shanghai Guosheng Group, the Shanghai government is offering $4.6 billion in special funds to encourage the growth of startups in the information technology, advanced manufacturing, new energy, and biomedicine sectors. Startups can receive additional government support in the form of rent reductions, entrepreneurship subsidies, and subsidies for innovation in line with the implementation of China’s 2030 Innovation Megaprojects like 5G, smart city and AI.

Startup Community

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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