Taiwanese e-commerce, telecom firms establish VC fund to foster startups

Business Next
Taiwanese e-commerce, telecom firms establish VC fund to foster startups

The VC fund will target startups in the verticals of online finance, health tech, big data and artificial intelligence

Caption: PChome Chairman Jan Hong-Tze(right) attended the press conference. 侯俊偉

Taiwanese telecom giant Chunghwa Telecom and the e-commerce retailer PChome Online are forming a venture capital fund to stimulate local startups.

The move announced March 28 to set up the fund called CHT-PCH No. 1 would offer capital and other resources for startups in online finance, internet-enabled medical services, big data and artificial intelligence.

As an example of how the NT$400 million (US$13.168 million) fund could help startups, PChome Chairman Jan Hong-Tze said he anticipates sharing data and website traffic information with start-ups selected by the new fund. PCHome gets traffic from about 1 million users.

Those resources will allow startups in emerging fields such online finance to retool their services and win customers.

Chunghwa Telecom, for its part, has an interest in cultivating tech startups in Taiwan. Telecom companies overseas already work regularly with local internet companies.

“We aim to combine the professional resources of both parties to significantly invest in Taiwan’s new innovative digital economy,” Chunghwa Telecom CEO Yu Chen said. The partnership is a “first step” in stronger cooperation between Chunghwa Telecom and PChome, the CEO said.

Funds to raise a unicorn

Taiwan’s plentiful homegrown IT talent, part of its legacy as a world high-tech manufacturing center, may let it spawn the next unicorn.

Taiwan Premier William Lai said in February local firms may be too preoccupied with high-tech contract work to prosper in newer fields such as artificial intelligence, unmanned vehicles and medicine.

Lai told his cabinet to take action that helps Taiwan nurture its first ‘unicorn’ within two years. A unicorn means a privately-owned company with market capitalization over US$1 billion and often fewer than 10 years in business.

PChome hopes that involvement in this venture capital fund will nurture startups that can expand beyond its core competence in web content and ecommerce.

“It’s absolutely necessary to cultivate companies with different services,” the company’s Chief Strategy Officer Tseng Hsun-yi told Business Next. “At this stage of PChome’s development, our users need more specialized services, which are difficult for one company to support,”

In other words, Tseng believes there are numerous opportunities for new start-ups in fields such as fintech and AI which would be difficult for PChome to address.

Also Read: Philippines’ AI-powered HR-tech startup Sprout Solutions raises US$1.6M led by Kickstart Ventures

In addition to venture capital funds, PChome hopes to provide institutional support and help cultivating a supportive environment for these new startups to grow.

Venture capital and technical help from PChome and Chunghwa Telecom could help Taiwanese start-ups become more internationally competitive against more established foreign competitors.

“Data is like a new energy source. The more data we use, the more refined it is, more people can share it, and it won’t violate the ecology of the internet,” Tseng said.

“Openness and sharing are actually very important.”

Also Read: Asia fintech investment on par with West but is more concentrated

Keystone Innovation Venture Capital will do investment research and evaluations of funding applicants for CHT-PCH No. 1.

—

The article Taiwanese Ecommerce, Telecom Firms Establish VC Fund to Foster Startups, first appeared on Business Next.

The post Taiwanese e-commerce, telecom firms establish VC fund to foster startups appeared first on e27.

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