WSJ: Asian venture capital is the first serious competitor for Sillicon Valley, and it’s growing fast

Anca Alexe 13/04/2018 | 11:51

The venture capital landscape is being transformed by huge amounts of money being invested in Asia, according to the Wall Street Journal. Asian investors have put almost as much money into startups last year as American investors – 40 percent of the global venture capital came from Asia, compared to 44 percent in the US.

Asia’s share in the venture capital market is up from less than 5 percent recorded only 10 years ago, and China alone has almost a quarter of global venture finance.

WSJ also notes that the looming trade war between the United States and China could reduce venture finance, but that the tariffs mostly focus on industrial or agricultural exports and that they are unlikely to have a big impact on startups.

This may signal a regional shift in leading technological innovation, as until recently, Sillicon Valley was by far the leader when it came to tech startups, both for money and know-how.

However, for now, the US is still the biggest driver of innovation, as many of China’s large investments are essentially copying American tech, according to the source. And while both the US and China mostly invest within their own borders, countries like Japan tend to finance foreign projects. However, the amount of Chinese venture investment outside the country more than doubled last year, due to the fierce competition inside the country. India is one of the biggest targets for Chinese and Japanese investors.

The most important area of investment is artificial intelligence, including machine learning, neural networks and predictive analysis.

 

Photo: dreamstime.com

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