Can Silicon Valley be challenged succesfully?


Extensive research by the Wall Street Journal, showing how venture investment from Asia is expanding rapidly, threatening to shift the power over innovation to the East. This is a great editorial, and I recommend you read the whole piece. I will just highlight some key findings here

The WSJ article starts with showing how total venture investment has developed globally (below). You can see that China has been playing catch-up for the last few years. A second chart in the piece shows that in 2017 the US made up 44% of total investments, China 24%, Japan 12%, and the rest of Asia 3.3%. Europe's total venture investments have diminished to just over 7% of the pie.

The article then shows where the money flows to:

The US receives the most funding, with China is a steady second. Interesting to see how little goes into Japan, even by the Japanese themselves.

The below chart shows that India is deemed to be fruitful ground.

It also shows that the US is trailing the Asian behemoths. A prime example if this is of course Paytm, which received funding from Alibaba's Ant Financial. This was also discussed in the Expert Series we did with Paul Schulte on Chinese AI and Fintech.

Finally, a chart that shows that venture capital gets invested more and and more across the border, how much the Asian venture investors are investing beyond their own borders, and that they invest nearly twice as much across borders as the US does.

Again, great article, with much more interesting data points and plenty of anecdotes from people close to the fire, such as;

Madhur Deora, chief financial officer for Paytm, one of India’s biggest e-payments firms, says the company approached Alibaba affiliate Ant Financial instead of U.S. backers for funding in 2015 because Chinese mobile-internet innovations are “way far ahead of anything that’s happened in the U.S.” Ant is preparing to raise $9 billion in a private funding round, according to people familiar with the matter, valuing it at close to $150 billion.

Find the full article here. An excellent read for the weekend


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