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Jack Ma or Ma Yun, Nicole Kidman and Wu Jing perform on Alibaba's Tmall double 11 global shopping festival 2017
Image: Jack Ma or Ma Yun, Nicole Kidman and Wu Jing perform on Alibaba's Tmall double 11 global shopping festival 2017

Asian Investors Steal Top Spot from USA for Startup Funding

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Image: Jack Ma or Ma Yun, Nicole Kidman and Wu Jing perform on Alibaba's Tmall double 11 global shopping festival 2017

A recent worldwide venture capital market analysis reveals a new leader in startup investments.

Asian investors comprised around 40 percent of the money invested in that market last year.

A Big Decade

Venture capital in Silicon Valley no longer leads the world in terms of its market share of funds injected into startups. The United States has long been known as the leader in startup investments. Now, it has lost its exclusive rights to that crown and must share it with Asian investors.

The Wall Street Journal conducted the venture capital market analysis. It found that a decade ago, Asian investors held about 5 percent of that market. In 2017, its market share rose to nearly 40 percent of the global capital investments into startups.

A Tough Tie to Accept

American investors have become accustomed to holding a proud lead over the world in this market. In 2008, the United States was the undisputed leader in terms of startup investments. That year, it broke records with $154 billion in investments. This year, it holds only 4 percent more than Asian investors – essentially tied.

Similarly, VentureSource data revealed that China is within around $1 billion of the startup investments made in the United States. The Tencent and Alibaba Chinese internet giants have been a significant driving force behind that trend.

Ant Financial, the company behind Alipay – the largest Chinese online payment service – recently became the largest fund in the world. It has an estimated value of $150 billion. It has become a significant player among some of the largest financial firms on the planet.

World’s Largest Exporter

China’s encroachment onto traditionally American territory has become increasingly commonplace. In 2007, it took the lead away from the United States as the largest exporter in the world. In 2011, it took over the American lead as the largest producer in the world. While it has not yet surpassed the U.S. in its investment into innovation and innovative companies, the gap is now small enough that they are considered to be neck-and-neck.

The Chinese government has made its own sizeable investments into technology. Beijing is seeking to lead the world in chip manufacturing as well as in the artificial intelligence field. The country’s goal is to rely less on imports and to manufacture as many of its own components as it can for the technology products it manufactures.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.