Taiwan’sStartup Investment
Scene
A deep dive into the trends of
Taiwan’s Venture Capital Industry

TAIWAN’S STARTUP INVESTMENT SCENE

Content Table
Editor’s Note

02

Executive Summary & Key Findings

03

Introduction

04

Researching and investigating Taiwan’s venture capital markets

08

Trends in Taiwan’s startup investment scene

11

Taiwan’s top startup industries

14

Who is investing in Taiwan startups?

17

Conclusion

19

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TAIWAN’S STARTUP INVESTMENT SCENE

Editor’s Note
This report was originally released by Eric Fan and the FINDIT team of the
Taiwan Institute of Economic Research on August 28th, 2019. FINDIT’s
mission is to integrate and provide valuable information related to innovative
entrepreneurship and market, such as early-stage investment market
dynamics, perspectives on the startup ecosystem, and latest ideas oftechnologies and media.
The purpose of this report is to share the data and findings on Taiwan’s
startup investment space. In this edition of the report, we have translated
the original document from Chinese to English and have also included somecommentary on some of the data from a TSS perspective. You can find theoriginal report here,

Brian Chen,
Investor Relations Manager, Taiwan Startup Stadium

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TAIWAN’S STARTUP INVESTMENT SCENE

Executive Summary &Key Findings
Both access to early-stage funding as well as information regarding venture
capital markets are important for a robust startup ecosystem. Taiwan’s startup
investment scene historically has lacked transparency and an aggregate
information database. The FINDIT research team has analyzed over 700,000
public and private news and deals from 2015 to 2019 August, aiming toestablish a more thorough picture of the early-stage investment market.
Between 2015 to 2019 August, there are 1,154 early-stage investment deals
in Taiwan which totaled over US $3.3 Billion, of which 792 are deals in which
the startup was founded after 2010.
From 2015-2018, Taiwan’s startup investment deals has an annual growthrate of 8.72%. This is roughly similar to the global average.
The government’s National Development Fund (NDF) has already made 130+
startup investments since its inception in 2017. This accounts for 17% of total
deals between 2015-2019 (note: 2019 data is from January to August).
In Taiwan, deals are significantly smaller, though we are seeing investment
deals above US $10 million steadily growing year over year.
Taiwan’s top startup industry is Health Tech. Between 2015 - August 2019,
there have been 188 Health Tech deals totaling US $572 Million.
Corporate Venture Capital investments comprise of 52% of all startup deals in
Taiwan.
Looking from an investor’s perspective, high risk, high reward, and hightechnological barriers are still the most attractive to investors looking to invest
in Taiwanese startups.

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TAIWAN’S STARTUP INVESTMENT SCENE

Introduction

As new economic models develop, industries and capital
markets rapidly shift and quickly adapt to the market.
Typically, when this occurs, many “startups” and new
ventures emerge to take advantage of the new market
opportunities. These startups not only play important roles
in highly competitive markets, but also challenge and disrupt
traditional industries, spurring innovation and change. This
new wave of entrepreneurship, which has exploded in places
such as the Silicon Valley, Israel, and China, is creating a new
type of company dubbed the “unicorn” -- companies valued
over US $1 Billion. Unicorns such as Uber, Airbnb, Stripe,and Slack are attracting attention from people all over theworld, especially investors.

TSS Perspective
The startup craze has become a global phenomenon -- many
countries don’t want to get left behind, and so governments
have been investing many resources to strengthen thestartup ecosystem and encourage entrepreneurial spirit intheir country. According to Startup Genome’s “2019 Global
Startup Ecosystem Report,” the global startup economy
continues to grow year over year, creating US $2.8 trillion invalue between 2016 and 2018, represeting a 20.6% increase
from the previous period and more than double what it was
5 years ago.
Similarly, Taiwan’s government began investing a substantial
amount of money and resources to build a robust startup
ecosystem. Taiwan Startup Stadium (TSS) is an example of
the government’s effort to bolster startup activity.

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TAIWAN’S STARTUP INVESTMENT SCENE

Founded in 2015 and funded by Taiwan’s National
Development Council ( 㕜 涮 剚 ), TSS’s main mission isto help Taiwanese startups grow and scale to world-class tech businesses by bridging innovative Taiwan
startups to industry thought leaders, potential investors,
and other resources necessary to be successful. How weserve startups is through a free “Starting Lineup X (SLX)”TSS has 180+ Taiwanese

membership program to help incubate and accelerate
early-stage companies, offering educational content andstartup members across all

workshops, investor and mentor matchings, and other

different verticals and industries.

startup resources. Currently, TSS has 180+ TaiwaneseSince 2015, we have trained

startup members across all different verticals and industries.

and led 130+ teams to over 12international conferences incountries all over the world!

Since 2015, we have trained and led 100+ teams to over
12 international conferences in countries all over the world!
We’ve definitely witnessed the remarkable growth of ourstartup ecosystem in the past few years, and are excitedabout the trajectory that we are on.

In the past few years, the Taiwanese government has been
actively investing numerous resources to build and establish
a startup ecosystem similar to that of Silicon Valley’s. From alegislative and policy perspective, in order to build a growing
and flourishing startup ecosystem, creating a stable androbust venture capital market is not only necessary, butalso a strong incentive for startup founders and investors.
In other words, venture capital plays a key role in nurturing
entrepreneurship and new ventures. For investors, it is5

TAIWAN’S STARTUP INVESTMENT SCENE

imperative to assess and track shifts in the capital market
and ever-changing industry trends, and to scope out new

To provide some insight into

potential investment targets. For startup founders, receiving

our 180+ startups, they haveexternal investment is a necessity to growing; it is importantcollectively raised $113M+ US
Dollars since 2015, with 82%

for founders to know who are the active investors, what
are the innovative trends, and what are the characteristics
of startups that get funded. For government agencies,of our startup members at thetheir responsibilities are to implement and adjust legislative

Seed/Pre-A funding stage.

policies according to capital market trends. All in all, a robust
VC market is necessary to spur entrepreneurial growth andcreate a stable startup ecosystem.

TSS Perspective
As already mentioned, TSS’s main mission is to continue
to build Taiwan’s startup ecosystem and bridge Taiwan
startups to the rest of the world. We agree that access toearly-stage funding is key to a flourishing startup community.
To provide some insight into our 180+ startups, they havecollectively raised $113M+ US Dollars since 2015, with 82%
of our startup members at the Seed/Pre-A funding stage.
It is important to note that these statistics are a current
representation of our SLX members and not the entire
startup ecosystem.

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TAIWAN’S STARTUP INVESTMENT SCENE

Furthermore, access to information of the venture capital
markets and early-stage startup funding is just as importantas access to capital in regards to building a successful
startup ecosystem. Global early-stage investment databases
such as Crunchbase, PitchBook, DealRoom, Preqin, andMoneyTree Report have contributed to the growth of otherstartup ecosystems. However, Taiwan has long lacked
such a database or place to find aggregate information on
early-stage funding. In the past, various organizations haveattempted to compile this research, but have only captured
an incomplete picture.

TSS Perspective
We agree that there is a lack of transparency and available
startup funding data in Taiwan. Many startup deals are
undisclosed to the public, and sometimes investors andangels choose to remain anonymous. While angel groups
do exist, they are quite segmented and not necessarily
very active in terms of the number of deals done eachyear. Furthermore, as you’ll see from the data later,
many of the startup investments in Taiwan are funded bypublicly listed companies. These investments are usuallystrategic investments, and are therefore usually not publicly
announced.

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TAIWAN’S STARTUP INVESTMENT SCENE

Researchingandinvestigating
Taiwan’s
venture capitalOver the past 2 years, the FINDIT team of the Taiwan

marketsof Taiwan. The FINDIT research team has analyzed data of

Institute of Economic Research (TIER) has been researching
and investigating Taiwan’s venture capital markets. After
analyzing and cross examining data from early-stage
startup investment databases, major media reports, publiccompanies’ quarterly financial reports, and press releases
published by startups, investment organizations, andgovernment investment reports, FINDIT has uncovered someinteresting data in regards to the early-stage capital markets
over 700,000 public and private news and deals from 2015
to 2019 August, aiming to establish a more thorough pictureof the early-stage investment market.
Of the hundreds of thousands of data analyzed, the FINDIT
team has found 1,154 early-stage investment deals totalingover US $3.3 Billion, of which 792 are deals in which thestartup was founded after 2010 (if you just look at just these792 companies, they totalled US $2.3 Billion). (See Figure 1)

Total Amount of Deals (startups founded after 2010)

Total Amount of $US Invested (startups founded after 2010)

Total Amount of Deals

Total Amount of $US

69%
792 Deals

1,154 Deals in Total

70%$2.3 Billion US$3.3 Billion US in Total

FIGURE 1. From 2015 to 2019 August, there have been 1,154 early-stage investment deals totaling US $3.3 Billion. Of the
1,154 deals, 792 are deals where the startup was founded after 2010. These 792 deals totaled US $2.3 Billion.

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TAIWAN’S STARTUP INVESTMENT SCENE

In 2015, there were 140 startup investment deals in Taiwan
totaling US $434 million. Since then, Taiwan has seen asteady growth rate in the amount of capital invested in earlystage startups. In fact, by 2018, there were 187 startup
investments deals totaling US $540 million! However, in
2016, the amount of investments dipped to US $370 million
due to slow market conditions. Also, the large spike in 2017
can be attributed to Gogoro receiving US $300 million. If we
exclude this large Gogoro deal from 2017, the total annual
growth rate from 2017 to 2018 would be at 20.27%. (SeeFigure 2)

Total Amount of Deals

The amount of deals$100 Million US

200
179
160

$100 Million US

10

187
172

8

140
114

120

6

80

4

40

2
4.34

3.70

7.49

5.40

2.19

0

0
2015

2016

2017

2018

2019
Jan - AugFIGURE 2. The total number of deals and the total amount of money invested into startups per year. Note: 2019 only
covers January to August.

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TAIWAN’S STARTUP INVESTMENT SCENE

Compared to the global market, the amount of startup
investments (both the total amount of money invested
as well as the number of investment deals) in Taiwan isroughly around the global average. According to the 2018
MoneyTree Report by PwC and CB Insights, the global total
number of VC investments was 14,247, a 9.52% increase
compared to 2017. These investments amounted to a totalof US $207.1 Billion, a 20.69% increase compared to 2017.

TSS Perspective
Once someone manages to manually sort and analyze

This 5-year program has been

all the data, the investment scene in Taiwan is actually

allocated $2 billion NTD, andmore robust than one might expect. This is very exciting

has already made over 60

because this growth can be attributed to the Taiwanesestartup investments since its

government’s investment in the startup ecosystem. In fact,

inceptionin 2017, the National Development Council (NDC) started
a program called the Business Angel Investment Program
through the National Development Fund (NDF). Throughthis program, NDF “aims to establish a sound startup
investment mechanism to improve the angel investment
environment in Taiwan” through co-investments in startups
alongside business angels. This 5-year program has been
allocated $2 billion NTD, and has already made over 60
startup investments since its inception. Furthermore, thisgovernment program’s investments already comprise of 17%
of all startup deals from 2015 to 2019 August.

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TAIWAN’S STARTUP INVESTMENT SCENE

Trends in
Taiwan’s
startupinvestment
scene

Within the investment scale of a single transaction, theamount of money and number of transactions are inversely
proportional; most deals are under US $1 million, followed
by deals between US $1 to 2 million. (See Figure 3) Although
there are still transactions above US $10 million in Taiwan,
most of the investment deals are still rather small comparedto the West. According to Preqin's statistics, the average
global transaction amount of VC investment in the seed/angel round in 2018 was US $2.3 million, with seed/angel round investment deals accounting for 35% of thetotal startup investments. The average global transaction
amount of a typical Series A amounted to US $16.1 million,
and accounted for 28% of the total investment deals. In
Taiwan, deals are significantly smaller, though we are seeing
investment deals above US $10 million steadily growing year
over year.

44%

19%

12% 4% 3%

8%

6%

4%

2015

47%

17%

5%

6%

4%

8%

7% 2%

5%

4%

9%

2016

45%

22%

6%

10%

7% 3%

6%

8%

8%

8%

2017

39%

18%

7%

2018

39%

25%

10%

9% 2%

4% 3%

10%

2019

Below $1 Million USD$1 Million - $2 Million USD$2 Million - $3 Million USD$3 Million - $4 Million USD

4 Million - 5 MIllion USD$5 Million - $10 Million USD

Above $10 Million USD

Non-disclosure

FIGURE 3. Percentage breakdown of deals by funding rounds.

11

TAIWAN’S STARTUP INVESTMENT SCENETSS Perspective
Our startup ecosystem is still relatively young compared tothat of Silicon Valley’s and other ecosystems. As a result,
we’re seeing startups “grow up” as the ecosystem continues
to develop. Taiwan Startup Stadium is currently around the
4-5 year mark of seriously building startups in Taiwan, andso at this juncture we’re seeing many startups fail...but at thesame time we’re also seeing the successful startups raisinglarger rounds to tackle the global market. This aligns withthe trends found in FINDIT’s report — investment deals are
steadily getting bigger as startups that were founded a few
years ago are experiencing growth and looking overseas
to find success. (See Figure 4)

100
Early Stage

Middle StageThe Rest

80
60
40
20
0

87%

10%

3%

2015 - 2019.8

79%

16%

15%

2018

FIGURE 4. As the research shows, from the span of 2015-2019, Series A and earlier rounds comprise of 87% of total deals.
However, if we just look at 2018, early-stage investment rounds comprise just 79% of total deals. Therefore, we can see that
there is a trend of more later stage rounds occuring in Taiwan.

12

TAIWAN’S STARTUP INVESTMENT SCENETSS Perspective
While the deal size for each investment round in Taiwan
is smaller than the global average, it is important to notethat the economics of starting and running a business in
Taiwan is lower compared to that of other countries. Thus,
the investment rounds comparatively are smaller to othercountries, but the use of those dollars can typically last a lot
longer and give Taiwanese startups enough runway to get to
the next milestone.
Currently, TSS has 180+ startup members in our freeStarting-Lineup X program. About 80% of our startups are

Taiwan has a population of
22 million, so in order for astartup to survive they must
penetrate new markets.

still at the Seed/Pre-A investments round. When TSS officiallystarted 4 years ago, 100% of our startups were Angel/Seedstage startups, so it’s been awesome growing alongside
Taiwanese startups! That’s why we’ve seen bigger deals asthese startups are looking to expand overseas. Taiwan has
a population of 22 million, so in order for a startup to survive
they must penetrate new markets. Therefore, going global isimperative for startups to succeed!

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TAIWAN’S STARTUP INVESTMENT SCENE

Taiwan’s
top startup
industries

Taiwan’s top industry in terms of VC funding received is thehealthcare and medical industry. Whether in total amountof money invested or total number of investment deals, thehealthcare and medical industry tops both categories. Since
2015, there are a total of 188 cases totaling US $572 million.
Aside from healthcare, we’ve found that startups that provide
software/hardware B2B services or startups that produce
electronic components also attracts investors. Startups that
focus on blockchain technology also attracts VCs, with a
total of US $185 million total invested in the last 4 years.

FIGURE 5. shows the top startup

More importantly, in 2018 alone, Taiwanese blockchain

industries in terms of total number

startups collectively attracted over $100 million US dollars;of investment deals closed (left)
and total funding amount (right)

startups like OwlTing and BitoEX are both good examples.
(See Figure 5 and 6)

from 2015 to August of 2019.

Health Tech

Health Tech
188

Enterprise Service$572M

Auto Tech

75

Electronics
74

IOT
58

Media & Entertainment
57

14

$336M

Media & Entertainment$249M

Blockchain$185M

Enterprise Service$183M

TAIWAN’S STARTUP INVESTMENT SCENETSS Perspective
It’s not surprising that Health Tech ranks #1 in terms ofboth the amount of total dollars invested and the numberof total investment deals. According to Bloomberg’s “Most
Efficient Healthcare 2018” report, Taiwan ranks in the top
10 of countries with the most efficient healthcare system.
This healthcare system, titled National Health Insurance(NHI), was instituted in 1995 with the population coveragereaching 99% by 2005. Furthermore, Taiwan implemented
a national electronic health record system in 2009. With a
Figure 6. shows the top startup

comprehensive NHI and health records of the population,industries in terms of total number

startups have great incentives to build solutions for theof investment deals closed (left)
and total funding amount (right) inhealthcare and medical industry — there is already a market

the year 2018.

to sell with access to medical data. Furthermore, in 2018,

Health Tech

41

Blockchain$101M

Media & Entertainment

Electronics
26

Enterprise Service$93M

Health Tech
$92M

19

Electronics

IOT
13Media & Entertainment
13

15

$58M

Enterprise Service$34M

TAIWAN’S STARTUP INVESTMENT SCENE

Taiwan’s Ministry of Interior announced that Taiwan has
officially entered an “aged society” as Taiwanese people over
65 years old accounted for 14.05% of the country’s total
population. An aging population is also one of the reasons
why Health Tech ranks #1.
FINDIT reports that B2B startups (both software andhardware) also rank quite high in terms of both the amountof total dollars invested and the number of total investment
deals. This can be attributed to the fact that Taiwan istraditionally a hardware/manufacturing country with avery organized supply chain. Corporate Venture Capital
investments actually comprise of 52% of all startup
deals in Taiwan, as corporates are looking for strategic
investments. Actually, it’s quite common for business units in
Taiwanese corporates to spinoff and develop products andsolutions specific to their parent company.

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TAIWAN’S STARTUP INVESTMENT SCENE

So who exactly is investing in these Taiwanese startups? The

Who isinvestingin Taiwan
startups?

percentage of local companies or Corporate Venture Capitalthat engages in startup investment is quite high, landing ataround 52% of total startup investment deals; VCs come insecond at around 48%. The government is also quite activein startup investments. Taiwan’s National Development Fund
(NDF) is quite active in the early-stage investment scene,
investing in around 17% of total startup investments. (SeeFigure 7)

Taiwan’s National
Development Fund (NDF) is
quite active in the early-stage52%

investment scene, investing

Corporate
Venture Capitalin around 17% of total startup
investments.

48%

Local Venture Capital

17%

National Development Fund

Figure 7. indicates the break
down of who invested into
startups (CVCs, VCs, Government,

14%
Overseas Investors

17

Overseas investors) in Taiwan andthe number of deals done for eachtype of investor.

TAIWAN’S STARTUP INVESTMENT SCENETSS Perspective
As we can see, Taiwanese corporates are actually quite
active in the early-stage startup investment scene, having
invested in 52% of all startup deals from 2015-2019. Thisperhaps is a reason as to why there is a lack of transparency
in the venture capital markets in Taiwan — corporates are
strategically investing and typically do not disclose theirinvestments to the public.
Also, as mentioned previously, Taiwan’s government is very
active in startup investments since the Business Angel
Matching program was incepted in 2017. It’s absolutely
amazing that the government has done 137 deals (probably
more since the report has been published) since 2017,
and the growth of startup funding in Taiwan can definitely
be attributed to this program. For more information on the
program, the American Chamber of Commerce Taiwan has
written a great article with more details.

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TAIWAN’S STARTUP INVESTMENT SCENE

Conclusion

Ultimately, as the startup ecosystem becomes more robust,
we have started to see more and more new startup venturesthat have been attracting the attention of investors, both
local and foreign. Taiwanese startups have been doing well in
attracting investments in the past two years, yet the scale ofa single transaction is still rather small compared to the restof the world. Looking from an investor’s perspective, highrisk, high reward, and high technological barriers are still themost attractive to investors looking to invest in Taiwanesestartups, such as biotech companies.

Looking from an investor’s
perspective, high risk,

To conclude, it is important to combine startups with existing
mature industries in Taiwan. As our research has uncovered,corporates and CVCs are the most active investors with B2B

high reward, and highstartups receiving the most of the funding. These startups

technological barriers arereceive massive support from big corporates when they

still the most attractive towere first founded; they’re core value is not to challenge

investors looking to invest in
Taiwanese startups

the existing industry, but to solve a specific pain point forthe corporation. These kinds of startups may not makethe headlines, but are still key to Taiwan’s early investment
market.

TSS Perspective
While we agree that high risk, high reward, and hightechnology startups attract the most investments, we believethat the definition of startups should expand beyond these3 criteria. There are numerous startups that may not havehigh-tech barriers, for example startups with network effects
or startups with strong branding. This is why our Starting
Lineup X membership program accepts all startups!

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TAIWAN’S STARTUP INVESTMENT SCENE

Also, here at Taiwan Startup Stadium, we have observed
more and more corporate involvement in the startup
ecosystem beyond just investments. Corporates are moreaggressive in working with startups — many corporates
have approached us to engage with them on the topic
of corporate innovation. They no longer want to just do
pitch sessions and startup matchings, but want to actuallywork with startups. As our CEO, Lereoy Yau, loves to say,
“Corporates are the new startups!”
One more important aspect of startup investments that was
not touched upon in this report is exit strategies. Because
investment sizes are smaller in Taiwan, and more than half
are strategic investments, it may not make sense for Taiwan
to focus on unicorns. Realistically speaking, mergers andacquisitions (M&As) are more likely the exit strategy forstartups in Asia, and that is what we should be focusing on
when building startups in Taiwan!
All in all, it is a very exciting time for startups and the startup
ecosystem in Taiwan. FINDIT’s report has shed light on theearly-stage fundraising scene and their results have shownthat we are on a growing trajectory with the government as
one of the main drivers.

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TAIWAN’S STARTUP INVESTMENT SCENE

Acknowledgements
The editor would like to give special thanks to the original author, PingHang (Eric) Fan, for his permission to allow us to translate the originalreport and add our own commentary. Also, special thanks to the FINDIT
research team for their efforts in uncovering the startup investment scene
in Taiwan. The editor would also like to give special thanks to Henk Hsieh,
the creative mind behind the design and infographics of this report.

About the Author
Dr. Ping-Hang (Eric) Fan is the Deputy Director of Div. VI at Taiwan Instituteof Economic Research (TIER), director of AppWorks Fund II and Harbinger
Venture Fund VI. TIER was established in 1976 by Dr. Chen-Fu Koo as thefirst private independent thinktank in Taiwan.
Dr. Fan is the lead of government projects, which aims to promote earlystage investment and startup ecosystem in Taiwan. He is responsible for
conducting the global early-stage investment database, research analysis
and startup fundraising events. In addition, he covers the research of
emerging technologies, innovation and entrepreneurship policies, andangel/venture capital investment.

About the Editor
Brian Chen currently serves as the Investor Relations Manager at Taiwan
Startup Stadium, with a mission to help Taiwanese startups go global.
At TSS, he is responsible for matching startups with overseas investors,
maintaining a comprehensive startup fundraising database, and executing
startup fundraising events.
Brian is a proud Northwestern University alumnus with a sales andmarketing background, beginning his career at Zillow. He believes in the
power of story-telling and prides himself on learning peoples' stories andbuilding relationships through listening.

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TAIWAN’S STARTUP INVESTMENT SCENE

Taiwan Startup Stadium
Taiwan Startup Stadium (TSS) is the leading startup ecosystem builder in
Taiwan with a mission to help Taiwanese startups grow and scale to worldclass tech businesses. TSS currently serves 180+ startups by connecting
startups with their vast network of mentors and investors, coaching
startups to go global through various educational workshops andcommunity events, and providing tons of perks from corporate partners.
With tailored resources at every stage of their growth, TSS startups areready to scale and go global!

Taiwan Institute of Economic ResearchTaiwan Institute of Economic Research (TIER) was established on
September 1, 1976 by Dr. Chen-Fu Koo as the first private independent
think tank in Taiwan. The main purpose of the institute is to actively engage
in research on domestic and foreign macroeconomics and industrial
economics in order to provide consultations to the government andenterprises and to promote Taiwan’s economic development.

FINDIT
FINDIT’s mission is to integrate and provide valuable information related toinnovative entrepreneurship and market, such as early-stage investment
market dynamics, perspectives on the startup ecosystem, and latest ideasof technologies and media.

22