This is the time for Asian startups to shine
The revolutionary global startup culture created nearly $3 trillion in value over the last two and a half years, a figure on par with the GDP of a G7 economy. The industry, which once seemed to be growing its roots only in the developed lands of the US and Europe, has now embarked upon a new journey to reach the developing world where its potential for growth is even higher because of several lucrative factors. At such a juncture, Asia, an abode for rapidly growing world-class smart cities, along with a young, energetic and bright workforce, is becoming a torchbearer in the emerging world order with its excellent and innovative startups.
The first name that catches our attention while thinking about this industry is the magnificent Silicon Valley. In fact, since the 1970s, the US has been the stepping stone for today’s expansive startup industry, although the start-up boom in the area didn’t actually begin until the end of the 1990s when the Dot Com boom swayed the whole world. That was when the power of small silicon chips to make the world an easier place to live in seemed a reality for the first time. Who knew then that companies like Amazon and Apple, which were budding blossoms, would be controlling the better part of the entire global trade one day? It was possible all thanks to people’s belief in start-ups and the core ideas that drove innovation and transformation.
But what has been catching our attention now is the change that has been happening in the global context currently. As per a report by Startup Genome (2020), which shows the percentage share of the industry continent wise, we clearly see a shift in trends globally. Even though North America and Europe continue to have the highest cumulative share in the industry, the developing world is catching up fast. The share of Asia-Pacific cities in the top global ecosystems has increased from 20% in 2012 to 30% in 2020. Six out of 11 top startup ecosystems are now in Asia Pacific. More specifically, if we exclude Sydney and Melbourne, most of this growth is fuelled by Asian cities, which is collectively way more than any of its other counterparts. This means that more start-ups are getting funded and being set on the way to transform these traditional economies.
Initially driven solely by China, the trend seems to be changing intra-Asia too, with the emergence of top cities like Singapore, Kuala Lumpur and Bangkok in South-east Asia, Delhi, Bengaluru and Mumbai in South Asia, and Seoul, Tokyo, Hong Kong and Taipei in East Asia.
Start-ups which are valued at $1 billion or above are termed unicorns. As of 9 October 2020, there are 171 Asian unicorns listed in CB Insights’ Global Unicorn List. Some of the big names are Tencent, Alibaba, Flipkart, Paytm, Didi, Baidu and Byju’s.
Compared to 2019, 31 new companies from Asia-Pacific made it to the list. As of now, China and India are leading the list of unicorns from Asian region. Interestingly, Chinese investors like Alibaba, Tencent, Shunwei, Steadview, Hillhouse and Fosun have been a major source of funding for Indian start-ups but things took a sharp turn after rising geopolitical tensions between the countries, eventually inviting regulatory compliances from the Government of India for funds coming from neighbouring countries and thus making the scenario a bit gloomy for Indian entrepreneurs.
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