Which Market Will Take Silicon Valley’s Lead?

A perennial question in Silicon Valley corridors is which market may eventually challenge its leadership. KPMG does an annual survey that gets at this question.
For the past couple of years, China has been gaining on the U.S. for tech innovation leadership but this year’s report shows a solid vote for the U.S.
The KPMG survey of nearly 800 technology industry executives finds that more than one-third believe the U.S. is the most promising market for tech breakthroughs. That’s a big jump from the prior survey when 26 percent named the U.S. as tops.
China retains a spot in second place, with 26 percent of the tallies, while India ranks third, at 13 percent. Despite concerns over Brexit and increased rivalry from Berlin, the U.K. comes in at a respectable fourth place.
Turning to cities that are emerging as rivals to the San Francisco Bay Area (increasingly plagued by high housing costs and a rich-poor divide), Shanghai again comes out on top. Tokyo also has a strong showing once again, ranked in second place.  Up and comers notably include New York and London, tied for third.
This year’s tech innovation survey continues to show a slant toward Asia. Of the ten cities named that could emerge as leading tech hubs, seven are in Asia, including two in China – Beijing and Shanghai.
In another sphere, the survey measured which tech industry leaders are most visionary. On this score, Tesla and SpaceX Elon Musk came in first while Google CEO Sundar Pichai was second. Facebook’s Zuckerberg was third while Alibaba leader Jack Ma broke through in fourth place.
Silicon Dragon played a part in writing and editing the publication that provides an overview of the findings here: The Changing Landscape of Disruptive Technologies, KPMG Technology Innovation Center.

Chinese drone maker DJI, based in Shenzhen and the world’s largest producer of recreational unmanned aircraft, is in talks with investors about raising $500 million in a pre-IPO round. DJI is looking to an IPO in Mainland China or Hong Kong. DJI is backed by Silicon Valley investor Accel Partners in a Series B and Sequoia Capital China in Series A.

Temasek has led a $250 million, Series E funding of AI-powered Chinese edtech startup 17Zuoye. The financing was joined by CITIC Private Equity Funds and Shunwei Capital.

Vickers Venture Partners, led by early Baidu backer Finian Tan, is behind a $10.4 million investment in UK blockchain startup Everledger, a ledger for diamond ownership and insurance transactions. Japanese e-commerce leader Rakuten and Bloomberg Ventures were also in on the deal. Vickers is investing from its new VC fund (its fifth and one of the region’s larger non-government funds) of $230 million raised last year.

IPOs
Sunlands Online Education, the latest China tech-related IPO in New York, raised $149 million on the NYSE. Backed by China’s New Oriental Education Company and private equity firm Orchid Asia in Hong Kong, together they invested $40 million in a concurrent private placement.
Sunlands didn’t have great timing on the listing as trade worries have intensified. Currently, all of Sunlands business is directed to the China market and is in Chinese language but international expansion could come, CFO Yipeng Li told Silicon Dragon. Sunlands, founded in 2003, has transitioned into an online-only offering for professional courses with 660,000 students and yearly revenues reaching $380 million.

The next China edtech IPO followed less than a week later, OneSmart International Education, a K-12 premium after-school education company, debuted on the NYSE and raised $179 million. Founded by a Harvard Business School graduate and backed by Carlyle and Goldman’s VC arm, the company tailors courses for each student, complementing education received at home and in school. With a university admission rate of 91%, and high school admission rate 90% (versus nationwide averages of 40% and 57%), the company’s programs are popular among those who can afford it.

NOTEWORTHY
Check out this interview with world-reknown restaurateur and artist Michael Chow, famed for his Mr. Chow Chinese cuisine outposts in London, LA, New York and other major cities. It seems that Silicon Dragon knows where to hang out when in LA — and with the In Crowd too! You can see photos of our recent China-Hollywood VIP dinner held at Mr. Chow in Beverly Hills, here.