July 14, 2017 4:05 pm JST

Asian startup investment finally tops US tally

Didi, other megadeals pushed total over $19bn last quarter

JOSHUA OGAWA, Nikkei staff writer

Didi Chuxing's booth at the Global Mobile Internet Conference 2017 in Beijing. © Reuters

PALO ALTO, U.S. -- Asian startups received $19.3 billion in investments in the April-June period, overtaking American ventures for the first time as rising stars like Chinese ride app provider Didi Chuxing guzzled up capital.

Investment in Japanese and other Asian ventures jumped 120% on the year, according to a report by PricewaterhouseCoopers and CB Insights. U.S.-based startups logged a 9% decrease, even as the global tally rose 31% to $42.9 billion.

Didi topped the list for the most money raised in a single round of funding last quarter, at $5.5 billion. India's One97 Communications, which operates the Paytm mobile payment platform, followed at $1.4 billion. All of the top five are based in Asia.

Many of the investors were in the region as well. Some $5 billion, or 90%, of Didi's round and the entire investment in One97 came from Japan's SoftBank Group. China's Tencent Holdings was the main investor in Indonesian ride app provider Go-Jek, and compatriot Alibaba Group Holding in food delivery app provider Ele.me.

Japanese ventures, particularly in the semiconductor and automotive sectors, have also benefited from Asian investment. Floadia, which develops memory chips that retain their contents when the power is off, has built a reputation among Taiwanese companies for energy-efficient, technologically advanced products. It received a total of 1.6 billion yen ($14.1 million) from parties including a United Microelectronics group member and the Innovation Network Corp. of Japan.

Some startups are also looking to Asian investors to take advantage of their regional presence. Hong Kong-based O Luxe Holdings is purchasing a roughly 85% stake in Japanese electric-vehicle startup GLM for about 12.8 billion yen. GLM wants to go global with an electric sports car slated to enter into mass production in 2019 and hopes to use O Luxe's sales network for watches and jewelry in Hong Kong and mainland China to find an audience for its high-end vehicles.

On an annual basis, Asian startups still lag far behind on fundraising. U.S.-based ventures received $62.7 billion in 2016 -- more than twice as much as their Asian counterparts. But the fact that Asia accounted for nearly half all investment made in startups for April to June points to the growth of the venture capital market there, according to PwC partner Suneet Dua.

SoftBank Group Corp.

Japan

Market(Ticker): TKS(9984)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 88,966.51M
Shares: 1,100.66M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 410,401.93M
Shares: 9,498.62M
Asia300

Alibaba Group Holding Ltd.

China

Market(Ticker): NYS(BABA)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 428,954.86M
Shares: 2,529.36M
Asia300

United Microelectronics Corp.

Taiwan

Market(Ticker): TAI(2303)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 6,380.67M
Shares: 12,624.31M

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