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Get the full version of the" 2021 Key Report on Taiwan's Innovation and Incubation Industry."
Get the full version of the" 2021 Key Report on Taiwan's Innovation and Incubation Industry."
Taiwan's B2B start-up capabilities are shining, not only driving the trend of Corporate Startup Engagement (CSE), but also creating a trend of technology venture capital. In the face of a promising future, how can new start-up teams take advantage of the situation?
If you have your finger on the pulse of the market, you can access the resources to start your own business! So, next, let's get to grips with the current state of Taiwan's start-up accelerator ecosystem and technology venture capital, so that investment trends and trends can be better grasped for technology start-ups to develop.
With government policies and corporate initiatives, Taiwan's new venture accelerators have sprung up, helping to connect resources and accelerate the growth of new ventures, as well as further promote the transfer of industry models to better cope with unpredictable future events such as the New Coronavirus outbreak (COVID-19).
This report describes the accelerators that will be offering a combination of dedicated investment funds, batches, programmes and demo days in 2020. These include the SOSV MOX | Mobile Only Accelerator, which focuses on cross-border Internet.
SparkLabs Taipei" is focusing on IoT hardware/AI/AR and VR, and AppWorks", which continues to track AI/IoT/Blockchain issues, and IAPS Industry Accelerators at National Yang Ming Chiao Tung University", which has been providing services since 2013, and Orange Fab Asia, which focuses on data/cloud/medical/financial/information security and video, and DIT Startup, which focuses on interactive entertainment, e-commerce and livelihood issues; BE Accelerator, which focuses on digital health and medical artificial intelligence; Yushan International Accelerator, which focuses on urban transport innovation; iLab Incubation Programme by Social Enterprise Insights, which focuses on improving social issues. The Smart Capital Accelerator focuses on cross-industry development, etc.
With the interaction of factors such as the multi-faceted trade war and the continued spread of COVID-19, there are three major changes in the function and nature of new venture accelerators in 2020 that warrant the attention of Taiwan's technology start-ups.
The first is about the trend towards investment. In recent years, new venture accelerators have been setting up venture capital funds for two reasons: firstly, to invest in the incubation phase to increase the survival rate of new ventures, and secondly, to increase the return on investment through the early identification of outstanding entrepreneurial topics and teams to increase the source of funding.
The second is about vertical development. With the advancement of technology and the shift of industry paradigms, the resources provided by the New Venture Accelerator are no longer "comprehensive counselling" in terms of community connections, basic entrepreneurship courses, business models and operational skills, but also professional counselling in terms of in-depth industry knowledge, technical support and market-specific linkages, in order to help new ventures develop into AIoT and vertical areas with differentiated characteristics.
Last but not least, it is about entrepreneurial collaboration. In order to expand innovation and accelerate the pace of digital transformation, medium and large enterprises are beginning to interact with new ventures through the CSE model. In response to this trend, start-up accelerators have begun to identify suitable start-up teams for companies through systematic screening and matchmaking, which, on the one hand, increases the success rate and chances of success of start-ups by leading small companies and, on the other hand, charges large companies consultancy fees to increase their revenue streams.
It is not enough just to understand the changes in Taiwan's new venture accelerators. We need to understand more about the current state of Taiwan's technology venture capital in order to quickly access international resources.
According to public information from the news media, quarterly and annual reports of the National Development Fund, information on new ventures invested in, venture capital fund disclosures, and the Crunchbase New Venture Database, a total of 103 technology start-ups were invested in 2020, with cumulative fundraising of over $10.44 billion (70 of which were willing to disclose the sum of their fundraising). If we look at the new ventures invested in by application, we find that medical technology and pharmaceuticals have the highest share (27.2%), followed by advertising/content and marketing (18.4%), and hardware and IoT (9.7%). In terms of time of establishment, the majority of Taiwan start-ups that investors prefer to invest in 2020 are teams that have been established for less than two years. Forty-two of the new start-ups invested in are new start-ups established in 2018 or 2019.
According to the data of the 70 companies willing to disclose the amount of fundraising, the average amount of fundraising in 2020 is $150 million. Of these, 14 technology start-ups have raised more than $150 million. A closer look at the areas of focus of these 14 start-ups reveals that they are mainly in medical technology and pharmaceuticals, with a total of five start-ups, namely AltruBio ($900 million), Alar Pharmaceuticals Inc. Ltd. ($550 million), Point Robotics ($540 million), TAIWAN PRECISION MEDICINE CORPORATION ($300 million) and aetherAI ($180 million). Other start-ups in the sector mostly provide services related to digital transformation, including advertising/content and marketing and B2B enterprise software solutions.
It is worth noting that investors are not limited to Taiwan. Of the 103 technology start-ups that raised funds in 2020, 18 received foreign investment. Of these, the highest proportion of Japanese investors invested in nine Taiwanese start-ups, which indicates a relatively high level of interest in Taiwan's technological innovation. Japanese investors have adopted a "strategic investment" approach. For example, Mynavi, a leading Japanese human resources platform, invested in Taiwanese job search platform Trantor Tech, Inc. and Tamagawa Electronics Co., Ltd., a major electronics company, has invested in Taiwan's 5G millimetre wave technology start-up, TMY Technology Inc.
In short, the Taiwan Tech Arena (TTA) has not only gained the attention of domestic and international venture capitalists and enterprises (VCs), but is also regarded as a strategic alliance that shows the boundless future of Taiwan's new venture ecosystem. It is expected that the more diversified CSE activities will drive innovation in Taiwan's overall industry and gain a voice in the global market.