Can Taiwan get back on the tech map with a fresh outlook on new kinds of startups? The answer could be yes, at least judging from some early indications of efforts underway to jumpstart Taiwan’s tech economy.
Anyone who thinks that Taiwan lacks tech talent should keep in mind its core long-time focus on semiconductors, a field this nation has owned for decades. And they should know that it was Taiwanese engineering that contributed to the original design for Tesla electric vehicles — and that is developing clones of the Tesla today.
Encouraging signs for a new breed of startups from Taiwan include major venture capital financings of promising young businesses ranging from e-commerce to 3D printing to mobile apps — far from Taiwan’s traditional stronghold. There’s even a unicorn valued company – Tutor ABC/VIP ABC with financing from Singapore’s GIC, Goldman Sachs, Alibaba and Qiming Ventures – among a group of promising young businesses.
The venture investment amounts going into Taiwanese startups are still tiny, at $421 million in 2015. But the financings are growing fast, up from $130 million in 2014, according to data gathered by government-funded startup hub Taiwan Startup Stadium, which was launched in May 2015. A good chunk or 15 of the 19 venture investments made last year in Taiwan startups went to series A financings of newcomers.
The capital is coming in from overseas, just as Taiwanese startups are angling to go international or at least regional. Sequoia Capital India has inked two deals in Taiwan — e-commerce player Pinkoi and adtech firm Appier – without a local office. Infinity Ventures from Japan has funded Taiwanese startups too, among them video streaming and photo sharing app maker 17App.
The strategic investors are getting interested too. Besides Alibaba, Foxconn and MediaTek are moving in to scout for deals. Successful Taiwanese entrepreneurs are becoming angel investors in another indication of an emerging startup and venture ecosystem for Taiwan.
Still, a conservative attitude exists among local investors, observers Anita Huang, so-called captain of Taiwan Startup Stadium, which has brought in global accelerator partnerships such as PlugNPlay, Y Combinator and Techstars to add some oomph.
Moreover, the Taiwanese government is building bridges with Silicon Valley. A recent delegation led by Vice Premier Dr. Chang San-cheng attended an investment symposium meant to foster ties between the two tech regions and made the rounds of startups, venture capital firms and political offices. The trip built upon the opening of a government-sponsored Taiwan Innovation and Entrepreneurship Center in the Bay Area in June 2015.
The government also is doling out capital for venture capital firms to invest in Taiwan and the Valley through its Taiwan Silicon Valley Tech Fund. This is a familiar strategy for several Asian nations that want to get ahead fast and onto an international stage. The new fund is earmarked to invest $300 million.
Last year, Taiwan’s National Development Council invested $83 million in five VC/angel investors: 500 Startups, AppWorks, Infinity Venture Partners, TransLink Capital and 360ip, a fund run by Battelle Memorial Institute and Taiwan’s Industrial Technology Investment Corporation.
The rise of a new era of Taiwan entrepreneurship has been developing even as VC was on the decline and attention was turned to the once-booming markets of Beijing and Shanghai. Two Taiwanese startups were among those I profiled for Forbes Asia list of millennial superstars: Flux and Snapask. Moreover, Silicon Dragon awarded Taiwanese startup Pinkoi one of its three trophies for Greater China startups.
I’ll be traveling to Taiwan later this month for Silicon Dragon Taipei 2016, where we’ll discuss the issues involved in jumpstarting this nation’s startup tech economy with venture capitalists, angel investors, dealmakers and entrepreneurs.
It’s been a few years since I visited Taiwan’s sprawling tech parks and interviewed local entrepreneurs and investors for the book I was then writing, Startup Asia. It will be good to get a fresh look and make some new evaluations.