#Asia Alibaba launches new $306m ‘not-for-profit’ fund to invest in Taiwan startups


Alibaba launches new $306m ‘not-for-profit’ fund to invest in Taiwan startups

Alibaba’s Taiwan fund accompanies the earlier one for Hong Kong’s entrepreneurs. Photo credit: Koadmunkee

Alibaba today announced it intends to launch a NT$10 billion (about US$306 million) fund to invest in startups in Taiwan.

UPDATE on November 19: Alibaba today launched the Taiwan Entrepreneurs Fund officially. The company did the same earlier today for its Hong Kong fund. We’ve adjusted the US dollar amount based on today’s exchange rate. The original March 2 article written by Josh Horwitz continues unchanged below.

According to the company, the fund will be managed by professional investment managers and will operate on a non-profit-esque model, wherein profits generated from investments will be re-invested into portfolio companies. The firm adds that the fund will help startups “start and grow businesses on marketplaces and platforms in the Alibaba ecosystem, enabling them to offer products and services in the Greater China region.”

While Alibaba’s announcement marks the official disclosure of the fund, it will still be subject to approval from Taiwan authorities before the company can carry forth with investments.

Ma first hinted at the establishment of a dedicated Taiwan fund when he visited the island last December. While giving a speech in front of CEOs from both sides of the straits, the ecommerce mogul expounded on the virtues of investing in young people, and encouraged budding entrepreneurs to head to China to start businesses with Alibaba’s assistance.

In February, Alibaba announced that it would launch a HK$1 billion (about US$120 million) fund for Hong Kong startups. That fund will operate along a similar model.

More and more startups

Alibaba’s direct influence in Taiwan as an internet company is less than that in the mainland. The company has been aggressively recruiting Taiwanese vendors to join Taobao, and even holds regular classes that teach potential merchants how to navigate the crowded marketplace. While Taiwanese consumers will regularly purchase items from Taobao or Tmall, which support local payment and delivery customs, the island’s ecommerce industry has matured independently of Alibaba. PCHome and Yahoo! Taiwan are generally cited as the island’s top two ecommerce providers.

Taiwan is home to a handful of early- and late-stage venture capital funds. Pinehurst Advisors, AppWorks Ventures, and Kamia invest semi-regularly in local teams, while CyberAgent Ventures and Cherubic Ventures both have staff on the ground. WI Harper, meanwhile, often participates in bets upwards of US$2 million on firms all over the world, from its offices in Taipei, San Francisco, and Beijing.

This year in particular, Taiwan looks poised to see more money for startups enter its borders. In addition to as-yet unannounced funds, Taiwan’s National Development Council recently pledged US$83 million across three venture capital firms as part of a long-term plan to fuel the island’s startup ecosystem.

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