Taiwan has been keeping the COVID-19 crisis under control. The numbers are below 600 despite having a population of 23.8 Mn. Many startups have not outsourced Chinese Customer service or administrative needs. The GDP growth rate is expected to increase by 1% for this year. While the GDP growth rate for developed countries such as the US and Germany are expected to fall by more than 4%.
In April, the Taiwanese government offered more options to help struggling startups. The National Development Council (NDC) of Taiwan offered an investment scheme. The scheme consisted of 6-12 months of funding in exchange for preferred stock. The applicants had to explain to the government the effects of COVID-19 on their business, how they intend to use the fund and also provide their stock issuance conditions, price conversion and redemption methods. This can help the businesses revive their operations to get back on track. The business can be from any industry except the traditional businesses. The applicants had 6 months to apply.
Case studies on Taiwanese startups and the impact of COVID-19
Due to the small impact of the pandemic, Taiwan’s domestic travel market has been recovering since May. The tourism sector witnessed an expansion in June. Recently a travel-based start-up from Taipei “KKday”, raised $75 Mn in Series C round. Cool Japan Fund and the National Development Fund of Taiwan led the funding.
Keeping the COVID-19 in mind the startups are trying to reduce the complications for the hospitals with the help of AI. One such startup is “Heroic Faith”, a healthcare startup that has developed a small device for doctors to check on the patients, thus reducing the risk of infections.
The information and communication technology sector account for the most number (16%) of startups in Taiwan. BE, a startup accelerator and VC firm and Taiwan Tech Arena and Startup Island together have launched “HealthforAll”, a virtual cross order collaboration platform. The platform will allow the international healthcare ecosystem to connect with Taiwan’s industries.
Opportunities for Taiwan
Taiwan’s experience during the 2003 SARS outbreak has made the Taiwan Government cautious and have been able to manage the COVID-19 situation competently. The overall impact on the startups has been minimalistic due to the low number of COVID-19 cases. This is the perfect timing for startups to grow their business. If the country continues to have a lower number of cases then there is a chance for the country to shine in the startup industry.
This research article has been produced by Investocracy, a company focused on connecting startups from emerging markets with Japanese investors.
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