Fighting the Taiwanese recession with home-style crowdfunding

Freedigitalphotos.net (by Stuart Miles. Image ID: 100328922)

Taiwan’s newly minted government has an under-used tool at its disposal to combat the recession: an exchange-based crowdfunding program for promising technology startups.

The two-year-old initiative aims to do crowdfunding one better by having the Taipei Exchange — the smaller of the island’s two bourses — endorse candidates for the program. Applicants are vetted before they’re allowed to register on a startup board and commence fundraising from the public.

The initiative may gain momentum now that newly sworn-in President Tsai Ing-wen has identified innovation as key to helping reverse three straight quarters of economic decline. Ding Kung-wha, who spearheaded the program and is now chairman of the Financial Supervisory Commission, said the startup board exemplifies how markets can support the real economy. It also prepares companies for full-fledged mainboard listings.

“This new board does three things: it helps companies get talent, get capital and raise their profile,” Eric Lin, general manager of the exchange’s startup incubation department, said by telephone.

Starting Small

Eighty-seven companies have registered so far on the startup board, of which only three have hit their targets and earned public listings. They’ve raised just NT$1.1 billion ($34 million) cumulatively from individual and professional investors.

While nascent, the program sports several success stories. Brinno Inc., which designs and produces photography equipment, is one such beneficiary: since joining the initiative, it’s managed to grow its market value 16 times to NT$1.6 billion. Another, HyXen Technology Co., has attracted strategic investment from iPhone-assembler Hon Hai Precision Industry Co. Overall, the exchange has aided startups from three of Taiwan’s most important industries: electronics, biotechnology and creative media, which now comprise more than three-quarters of the program’s registrants.

“The main fear in crowdfunding centers on the health of the startup’s management and finances,” Brinno President David Chen said. “But the backing of the government lends confidence.”

The exchange’s effort is just one facet of a broader government initiative to try and jumpstart a long-overlooked startup scene. Since Tsai took office, her administration has pledged to create a NT$100 billion nationwide innovation fund.

Yet they can only do so much, said Michael On, President of Beyond Asset Management. While the government can help entrepreneurs access capital, the main attraction for investors is ultimately sustainable revenue growth, he said.

Also read:

Taiwan banks explore promise, peril of Southeast Asia

Taiwan begins review of Chinese Tsinghua’s $1b deals in two semiconductor firms

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.