The region punches above its weight when it comes to venture capital funding, although tech industry stalwart San Francisco continues to keep the lion’s share for itself.
Right now, everyone seems to be on the hunt for the last untrammeled figments of our existence that have not yet been smoothed out by a large language model or a new Gen AI app.
In short, everyone wants to be the next NIVDIA. And if that is indeed the case, then cities in the Asia Pacific seem to be a great place to make it happen, at least according to a visualization released Thursday by digital publisher Visual Capitalist.
Mainland on Top
They took data from Pitchbook and analyzed cities over a six-year period up until the second quarter of last year, considering the number of deals, exits, and fundraising, after which the publisher ranked and graded the scale and maturity of each startup ecosystem.
Beijing placed third, just behind New York, followed by Shanghai. Shenzhen came in eighth place, just in front of Seoul, Tokyo, and Hangzhou.
The Per Capita Take
Singapore followed in 14th. Although at face value, it doesn’t sound all that great, the publisher was at pains to note that it enjoyed the highest amount of venture capital funding per capita in the entire world, equal to $1,060 for each citizen in the city-state, clearly outpacing the US, at number 2, with $345.
The ranking, however, belies some hard questions that need to be answered, both regionally and worldwide. San Francisco remains utterly dominant worldwide, with everyone else left picking up the few remaining crumbs.
The Exit Question
The Northern Californian city raised $428 billion, or almost half a trillion, in capital over the six-year period, with New York and Beijing getting roughly $180 billion and $160 billion respectively.
The average US-based and regional pundit might maintain it is a matter of time before China takes over, but a separate visualization published in early May seems to tell an entirely different story.
The People Take
If everything-AI is the startup mantra of our time, then China doesn’t look quite as good. The US led the world with 5,509 newly funded artificial intelligence related startups between 2013 and 2023 while the mainland placed a distant second with 1,446.
Moreover, if the number of people of the world’s now second most populous nation is considered, China pales next to the likes of a UK, which came in at third place with 727, an Israel (442), a Canada (397) or a France (391).
Singapore Again First
In fact, from the point of view of an informally cobbled up population-startup ratio, the only countries that fare at all well are Switzerland (123 startups/almost 9 million citizens), Sweden (94 startups and a population of 10.5 million).
However, Singapore is again the city on a hill here, leading the per capita pack with its 5.6 million highly effective residents pumping out a gob smacking 193 startups collectively.
Hard Tech Investment
Visual Capitalist indirectly referenced the rationale for lackluster the figures out of China. Beijing placed second because that is where TikTok parent ByteDance is from, and it is one of the most valuable private companies globally.
Other than that, however, funding for startups in the mainland has been increasingly driven by government-backed funds focusing on semiconductors and electric vehicles in alignment with the country’s long-term strategic objectives.
Disappearing Europe
Another interesting facet was the relatively poor showing of European cities in the startup ranking. London came fourth, followed by Berlin in 20th. Other than that, the continent came up empty-handed, which is ironic given the lead picture on this article portrays a very ecological, and new age, skyscraper in Milan.
Still, that was somewhat made up by the fact that the UK (3), France (6), Germany (9) Switzerland (13), Sweden (14) and Spain (15) put in a showing the country startup table, which seems to indicate that the AI and tech hubs there are not necessarily located in the main urban hubs.
Future Unknown
These are all just figures, of course, and they just tell one side of the story from a very basic perspective, almost like holding up a finger to figure out which way the wind is coming from.
At the end of the day, the question for all, regardless of country or city, government and economy, is who can make the next NIVDIA happen.
