Taiwan has a comparatively small but thriving startup scene, which is characterized by Taiwan’s economic focus on electronics and semiconductors, and its position as a key link in global supply chains. A large share of startups are related to electronic solutions and IoT, with many of them having established connections to larger corporates. The Taiwanese government is making considerable efforts to build up a favorable startup environment, and the number of early-stage startup financings has increased significantly over recent years.
Taiwan’s startup environment
The startup scene in Taiwan focuses primarily on the domestic market and most tend to be comparatively small in size. The
median investment volume of early-stage startups after their initial seed investment amounted to about 1.8 million U.S. dollars in 2021. However, the low-cost operating environment and Taiwan’s technically skilled labor force provide good opportunities for developing a business from limited capital. Domestic startups are characterized by businesses which develop solutions tailored to Taiwan’s strong consumer electronics and service industries. Not surprisingly, the
share of startups that have been developed out of existing companies or received funding from corporations is high, reaching 49 percent in 2021. Besides electronics and energy solutions, the most important sector for startup investment is health tech, having collected a total investment volume of nearly 1.7 billion U.S. dollars between 2015 and 2022.
Government support for startups
The Taiwanese government has set up ambitious plans to build up a supportive startup environment and promote technological innovation. It aims at developing Taiwan into a “startup island” by shoring up local startup support, providing sufficient funding, and fostering international connections. While funding from the public sector is being scaled up, benefitting an increasing number of startups,
Taipei city provides the most favorable regional startup environment, with around 67 percent of accelerators and 84 percent of venture capitalists being based in the city. The startup scene is relatively open to internationals, while a
strong dependence on the China mainland market exists. During the spread of the coronavirus pandemic in 2020, the focus shifted to North American markets, but China quickly regained its predominance in 2021.
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