The startup scene in Taiwan stands poised to receive a huge financial injection that could set the country on a course to reclaim its prominent status as one of the four Asian Tigers. Alibaba has announced an NT$10 billion ($316 million) fund to enable young entrepreneurs from Taiwan to start and grow businesses through resources within the Alibaba Group’s e-commerce ecosystem, including Taobao Marketplace, which already feature Taiwan and Hong Kong shopping websites. In addition, the Taiwan government has announced a crowdfunding undertaking similar to Kickstarter in the US.
“I have been impressed by the young people in Taiwan because they are well educated, innovative and hardworking,” said Alibaba Group Executive Chairman Jack Ma in a statement. “By encouraging the entrepreneurial spirit among Taiwan’s young people, we hope to spur similar efforts by others to enable the younger generation to unleash their potential and realize their dreams.”
Alibaba already announced a similar fund of $129 for Hong Kong startups in February. According to a company statement, the program which will see professional investment teams selecting and funding promising businesses started by young entrepreneurs, will be launched after June 2015 subject to regulatory requirements and approvals. Taiwan has ordered Alibaba to stop doing business in Taiwan within six months because it failed to comply with investment rules governing Chinese companies. Alibaba chairman Jack Ma is keen to help Taiwanese startups. At a forum in December he said he wanted to support Taiwanese entrepreneurs to go to China to learn about starting and running their own businesses. He said then that he is keen to bring companies from all over the world to sell their products in China.
There are already Taiwanese businesses that are run successfully on Alibaba shopping websites selling directly to Chinese consumers.
Alibaba has been partnering with small-and medium-sized enterprises from Taiwan since 2008; the company began recruiting from Taiwan universities last year.
Crowdfunding comes to Taiwan Taiwan’s Financial Supervisory Commission announced its plans to create a crowdfunding platform to help young entrepreneurs raise money in January this year.
In an interview with Bloomberg, National Development Council Minister Duh Tyzz-jiun said “Startups are the fruits of innovation…. They benefit our economy and generate employment opportunities.” Taiwan must find a way to revive its industries which have been hit hard by lower production costs in China and a crowdfunding platform has the potential to attract innovative projects and people from around the world that can breathe new life into Taiwan industries.
Crowdfunding has become a popular way to raise funds for projects via monetary contributions from a large number of people via an online website.
In Taiwan the crowdfunding platform will be operated by local brokerages regulated by the FSC. According to the Bloomberg report only companies with NT$30 million ($954,000) or less will be allowed to sign up. The program is scheduled to start by May.
Investment in R&D Taiwan can’t compete with China on volume or mass production. The country has to find another way to be competitive. The government wants to support new companies that can drive innovation in Taiwan. To this purpose, the National Development Council has announced that the Taiwan government will join venture capital funds in raising around NT$22.2 billion to invest in Taiwan and Silicon Valley startups.
“We cannot compete with China on volume or mass production,” Duh told Bloomberg, adding that corporate profits should instead come from intangible resources such as research and development. “We want to move the investment upstream.”