Research

1. Taiwan’s Early-Stage Investment Hits New High

While the global venture capital market remains in a downturn, Taiwan has forged its own path, shaping a distinctly different landscape. We reviewed 3,605 early-stage investment transactions [1] in Taiwan from 2015 to Q1 2024, totalling US$14.06 billion (approximately NT$421.8 billion). Over the past nine years, Taiwan's early-stage investment market has undergone two key turning points.

The first turning point occurred in 2019 when the startup investment was strongly promoted by the Business Angel Investment Program of the National Development Fund (NDF), driving a wave of investment in startups and significantly boosting the number of transactions. In 2019, 447 transactions were recorded, reflecting an increase of approximately 47% compared to 2018. Although the pandemic impacted 2020, transaction volume remained above 400.

The second turning point was driven by the global movement to combat climate change and the growing trend toward net-zero carbon emissions and sustainability. Between 2020 and 2021, Taiwan's related policies, resources, and strategies quickly aligned with this global shift, resulting in a rise in early-stage investment. Transaction value doubled from US$1.33 billion (approximately NT$39.8 billion) in 2020 to US$2.68 billion (approximately NT$80.5 billion) in 2021. Deals related to energy saving, energy generation, energy storage, and energy systems became particularly popular in the market.

 

In 2023, the early-stage investment market in Taiwan continued to gain momentum, with the number of transactions reaching 542, a growth of approximately 10.4% compared to 491 transactions in 2022. The investment amount also increased by about 9.8%, rising from US$2.54 billion (approximately NT$76.2 billion) in 2022 to US$2.79 billion (approximately NT$83.6 billion). Notable investment deals in 2023 include Acepodia, Taiwan Bio-Manufacturing Corporation (TBMC), GeChi Compound Semiconductor (GCCS), and APh ePower. In Q1 2024, the total investment scale reached US$530 million (approximately NT$16 billion) across 107 transactions. Standout successes include iKala Cloud, Largan Energy Material, H2U, and Eastern Union Interactive.

 

2. Average Transaction Value Slightly Decreased, with a Focus on Small and Medium-Sized Investment Deals

In 2023, both the transaction scale and the number of deals in Taiwan’s early-stage investment market grew. However, the average and median transaction value did not increase. The average transaction value in 2023 was US$5.54 million (approximately NT$166 million), while the median transaction value was US$1.7 million (approximately NT$50.9 million). Although these figures represent a decrease of 2.02% and 6.08%, respectively, compared to 2022, they remain significantly higher than the levels seen in 2020.

Upon further analysis of transaction value, the data indicates that in 2023, the number of transactions in Taiwan’s early-stage investment market within the range of US$1 million to US$2 million accounted for 21% of the total, up from 17% in 2022. Similarly, transactions in the US$2 million to US$4 million range grew to 16%, compared to 14% in 2022. On the other hand, transactions between US$7 million and US$10 million decreased to 3%, down from 5% in 2022. The share of transactions over US$15 million also dropped to 8%, compared to 9% in 2022. In other words, the decrease in average and median transaction value in 2023 was primarily due to the rise in the proportion of medium-sized investment deals. Meanwhile, in Q1 2024, the share of transactions between US$4 million and US$15 million increased, contributing to a rise in the median transaction value, which reached US$2.45 million.

Additionally, in 2023, small investment deals under US$1 million accounted for 31% of all transactions, but represented only 3% of the total investment volume. Conversely, large investment deals over US$10 million comprised 13% of all transactions and contributed 67% of the total transaction volume.

 

While these small investment deals may not involve large amounts of capital, they still play a crucial role in nurturing the growth of startups in Taiwan. According to the data collected from recent years, the share of small investment deals has gradually declined since 2019. This is partly due to large-size deals over US$10 million attracting substantial funding, and partly because, as startups grow and expand their businesses, they progress to the next round of funding.

 

 

 

 

3. Energy and Health/Biotech Gain Prominence, Hardware and Manufacturing Reflect Industry Demands

 

In terms of sectors receiving investment, both the energy sector and health & biotech sector recorded similar levels of activity in 2023, with 94 deals each. However, the energy sector attracted a higher total investment amount, reaching US$1.07 billion (approximately NT$32.1 billion).

 

With the focus on net-zero carbon emissions and green energy sustainability, sectors such as energy generation, energy saving, energy storage, and energy management have become in-demand fields in Taiwan's market. This demand has been supported not only by private sector investments but also by policy resources, which have fostered the growth of energy-related industries. From 2015 to Q1 2024, 357 transactions were recorded in the energy sector, totalling US$3.69 billion (approximately NT$110.7 billion), with rapid growth observed after 2020. In 2020, early-stage investment in the energy sector, in terms of investment amount, surpassed that of hardware and health & biotech. Between 2020 and Q1 2024, investments in the energy sector accounted for 92% of the total investment during this period.

Major investment deals between 2023 and Q1 2024 include He To Energy Integration and SunnyRich Multifunction Solar Power, specializing in the development of solar farms; Taiya Renewable Energy, focusing on offshore wind farms; Star Energy Storage, developing energy storage infrastructure; APh ePower, concentrating on R&D in aluminium-ion batteries; Truewin Technology, developing energy storage solutions; GUS Technology, providing battery cell manufacturing, battery module design, and one-stop solutions for applications; and Largan Energy Material, a startup co-founded by researchers from the Industrial Technology Research Institute (ITRI), focused on TiNb2O7 (TNO), a cathode material for lithium-ion batteries.

Meanwhile, the health and biotech sector remains a popular field of investment, drawing attention from both domestic and international early-stage investors. Due to its high capital requirements and significant entry barriers, this sector has consistently maintained strong investment interest over the years. From 2015 to Q1 2024, Taiwan’s health and biotech sector recorded a total of 687 investments, amounting to US$2.79 billion (approximately NT$83.8 billion). In 2023 alone, 94 investment deals were recorded, totalling US$564 million (approximately NT$16.9 billion).

Major investment deals between 2023 and Q1 2024 include Acepodia, which focuses on immuno-oncology therapy; Taiwan Bio-Manufacturing Corporation (TBMC), a startup initiated by the Ministry of Economic Affairs and jointly founded by the Industrial Technology Research Institute  (ITRI) and the Development Center for Biotechnology (DCB); OBIGEN Pharma, which specializes in the research and production of botulinum toxin; AnnJi Pharmaceutical, which focuses on the development of innovative small-molecule new chemical entity (NCE) drugs in clinical stages; AnBogen Therapeutics, which focuses on designing and developing precision oncology therapies; and QT Medical, specializing in the development of medical-grade 12-lead electrocardiogram (ECG) systems and cardiac disease screening services.

Additionally, the hardware sector has been a key focus of Taiwan's early-stage investment market, playing a crucial role in differentiating Taiwan's startup ecosystem from those of other countries. Leveraging Taiwan's mature electronics supply chain, companies receiving investment in the hardware sector primarily focus on the research and development of electronic components, semiconductors, and related products. From 2015 to Q1 2024, 551 transactions were recorded in the hardware sector, totalling US$1.77 billion (approximately NT$53.1 billion). In 2023, the number of investments reached a record high of 76 deals, amounting to US$278 million (approximately NT$8.34 billion).

Notable companies receiving investment between 2023 and Q1 2024 include Kneron, which specializes in research and development of edge AI SoC processors; Neuchips, which provides AI chip design and hardware acceleration solutions; Bravotek Electronics, which focuses on power management ICs and mixed-signal ICs; TMY Technology, which develops mmWave solutions for communication applications and hardware/software solutions; MAIN DRIVE Corporation, which specializes in the design and manufacture of harmonic speed reducers; and Chip-GaN Power Semiconductor, which specializes in third-generation semiconductor power management IC design.

Investments in the manufacturing sector have primarily focused on materials, machinery, and processing. From 2015 to Q1 2024, the sector recorded337 transactions, with a total investment of US$960 million (approximately NT$28.8 billion). In 2023, 43 deals totalled US$204 million (approximately NT$6.12 billion).

Notable companies receiving investment between 2023 and Q1 2024 include Unikorn Semiconductor, which focuses on epitaxy and advanced wafer processing foundry services; Shinsol Advanced Chemicals, which produces electronic-grade hydrogen peroxide; Asphetek Solution, which specializes in lens and optical module manufacturing; and Energy Composite Technology, which focuses on the design and manufacturing of composite materials in the green energy sector.

Lastly, in the IT and software sector, there were 294 transactions between 2015 and Q1 2024, with a total investment of US$650 million (approximately NT$19.5 billion). In 2023, 35 deals were recorded, amounting to US$82.13 million (approximately NT$2.46 billion). Although investment enthusiasm in this sector is not as strong as in the energy, health & biotech, hardware, and manufacturing sectors, many companies that are highly active in Taiwan's startup ecosystem have still managed to attract investors’ interest.

Notable companies receiving investment between 2023 and Q1 2024 include XRSPACE, which is dedicated to building metaverse platforms; Profet AI, which offers AI solutions for the manufacturing industry; DeepMentor, which specializes in the miniaturization of AI models; and Kdan Mobile, which develops AI-driven workflow automation and data solutions.

 

 

 

4. Corporate and Corporate Venture Capital as the Backbone of Taiwan's Early-Stage Investment Market

Among the 3,605 early-stage investment transactions from 2015 to the first quarter of 2024, corporate and corporate venture capital (C/CVC) accounted for 63.9%, playing a crucial role in the development of Taiwan's startups. In addition to providing financial support, these investors leverage their corporate resource networks to accelerate startup growth.

During this period, C/CVCs participated in 2,305 investment deals, with an average transaction value of US$4.81 million and a median transaction value of US$1.5 million. The primary investment focus was on health and biotech with 404 deals, followed by the hardware sector, closely tied to Taiwan’s electronics industry with 393 deals. The rapidly growing energy sector ranked third with 317 deals, reflecting increased corporate interest, while the manufacturing sector came in fourth with 264 deals. Driven by growth in energy, health & biotech, and hardware sectors, the number of C/CVC-backed investments has steadily increased, rising from 181 in 2017 to 384 in 2023.

Next are domestic and international venture capital firms (VCs), which participated in 1,260 early-stage investment deals from 2015 to Q1 2024, accounting for approximately 35% of the total. The average transaction value was US$6.29 million, and the median was US$2 million, both higher than those of C/CVCs.

In addition to the health and biotech sector (291 deals) and hardware sector (155 deals), which align with C/CVCs investment interests, VCs also showed notable focus on the information technology and software sector (118 deals). This includes several enterprise software deals incorporating AI applications, such as machine learning solutions for the manufacturing industry, image recognition and management services, and software development for enterprise process automation. In 2023, the number of VC-backed investment deals reached 142, representing a 5.3% decline from 150 deals in 2022.

Among the many investors, the National Development Fund (NDF) plays a crucial role in the development of Taiwan's startup ecosystem through its participation in early-stage investments. The NDF’s Business Angel Investment Program, which combines funding and resources from corporates, CVCs, and VCs, has effectively boosted enthusiasm for startup investments in Taiwan.

From 2015 to Q1 2024, the NDF participated in 476 early-stage investment deals, accounting for approximately 13.2% of the total. The average transaction value was US$2.89 million, and the median was US$960,000. In terms of sectors, health and biotech-related deals represented the largest share of the NDF investments, with 115 deals during the period. The second-largest sector was hardware, with 65 deals. However, the NDF's overall investment scope is broad, and deals involving technological or business model innovations are also eligible for funding. As for recent trends, the NDF's investment activity slowed in 2023, with 45 recorded deals.

Foreign investors participation has been relatively limited, with only 396 deals recorded from 2015 to Q1 2024, accounting for 11% of the total investment deals. However, the average transaction value for these deals reached US$13.07 million, and the median value was US$4.79 million. Startups with strong potential for international expansion are more likely to attract foreign investors. This means that product and business maturity, as well as the choice of investment sector, are often evaluated based on their international potential. In 2023, foreign investors participated in 29 deals, down from 58 in 2022. Looking ahead, enhancing the international visibility of Taiwan's startups and increasing the participation of foreign investors will be critical to promoting the globalization of startup enterprises.

 

 

5. Conclusion

FINDIT research team reviewed a total of 542 early-stage investment deals in Taiwan in 2023, reflecting a 10.4% increase from 2022. The overall investment volume surged by approximately 9.8%, reaching a record high of US$2.79 billion. This growth stands in stark contrast to the recent downturn in the global venture capital market.

Notably, transactions exceeding US$10 million played a significant role in driving the overall investment volume, although small- and mid-sized investment cases continued to make up the majority of deals. By sectors, the energy and health & biotech sectors continued to attract substantial capital, particularly in high-capital deals such as renewable energy, energy storage systems, and new drug development and manufacturing. Supported by both government policies and corporate investments, these sectors have become key focal points in Taiwan’s early-stage investment landscape. Meanwhile, Taiwan’s industrial foundation has strengthened investments in hardware and industrial manufacturing, attracting investors’ interest in fields such as semiconductors, IC design, communication technologies, and advanced materials.

Looking ahead, ongoing global political, economic, and technological shifts continue to pose challenges to startup development. Achieving Taiwan’s vision of becoming a world-class "Startup Island" will require addressing several key issues.

One critical challenge is the infusion of capital and the cultivation of early-stage startups. While early-stage investment has grown in recent years—boosted by the energy sector, with many startups progressing to subsequent funding rounds—cultivating new startups and sustaining a positive cycle of innovation and iteration within the ecosystem remain critical challenges. To address this, more effective funding mechanisms should be designed to support startups at the inception stage. Additionally, improving startup incubator programs will help cultivate more investable startups.

Another crucial aspect is global expansion. With increasing policy support and resources, Taiwan's startup ecosystem has established stronger connections to international markets, and the visibility of "Startup Island Taiwan" continues to grow. Moving forward, whether through collaboration with overseas investors or by focusing resources on startups with strong execution capabilities for global expansion, these will be key strategic consideration for Taiwan’s internationalization efforts.

 

Note [1]:

The transactions reviewed include:

1.Companies registered in Taiwan, or registered overseas but founded by individuals from Taiwan;

2.Private equity investment made prior to a company’s public listing (including OTC or emerging stock market listings), excluding debt financing, convertible bonds, subsidies, and ICOs.

3.Acquisitions and 100% investments from a parent company into its subsidiary are also excluded.

 

Data sources include: (1) International early-stage investment databases; (2) News media; (3) Invested companies; (4) Investment institutions, including institutional investors and information on investments made by publicly listed companies; (5) National Development Fund (NDF) quarterly/annual reports and government investment projects; (6) Company registration information from the Administration of Commerce, Ministry of Economic Affairs.