Where will the next unicorn start-up in Asia Pacific come from?

The number of privately-held start-ups achieving at least a US$1 billion valuation has surged from a handful six years ago to over 280 by early November 2018, according to CB Insights research. The US dominates the list of companies, supercharged by venture capital or other private funding and known as ‘unicorns’ for their rarity. And China follows. Yet the start-up scene is starting to acquire an international feel. Faster-than-expected growth in the internet economy is helping to fuel the trend and supporting a new crop of start-ups outside of the US and China.

No one economy rises clearly to the top

We asked over 700 business leaders to name Asia-Pacific Economic Cooperation (APEC) economies outside of the US and China that they feel have the right conditions to spark the next unicorn start-up.

Factors that CEOs say will fuel the spread of start-ups in APEC

Note that deep pools of investment capital – commonly considered crucial to start-up success – take a back seat to policy support for entrepreneurs as well as digitally-savvy cultures when CEOs consider factors that can support the spread of start-ups ecosystems in smaller APEC markets. These economies are gaining the talent to grow businesses that can thrive among technology-hungry consumers, and attract outside investors. “There’s a wave of US-educated talent moving back; they are obsessed with reaching customers digitally,” noted a respondent who believes Thailand has the right conditions for start-ups.

Who will invest?

Venture capital firms are a traditional source of funding for start-ups; direct investments by corporations typically play a lesser role in overall financing. However, with a third of respondents already investing in local start-ups, this may also start to change.

This is a small sample of the over 700 comments PwC received from business leaders in support of their selected APEC economy as the springboard for the next APEC unicorn beyond the US and China. The sentiments shown here include only those executives selecting an APEC economy other than their own domestic economy.

CEOs size up conditions for start-up success in other APEC economies

Which economy and why?
Australia “A strategic player in the global market with impressive Free Trade Agreements.”
Canada “Opening up markets that other areas in the world are not in talks about yet.”
Chile “Combines a good educational system with investments in digital technologies and has an ambition for a global reach.”
Chinese Taipei “Offers an innovative private sector.”
Hong Kong, China “Has good strategies in place to help businesses gain momentum.”
Japan “Manages continuous development of innovations on a large scale.”
Indonesia “Has a huge base of digital users spending four hours on their mobiles daily.”
Republic of Korea “Consider the rapid pace of digital devices development and its massive pool of talent.”
Malaysia “E-commerce is on the rise and business will flourish.”
Mexico “Growing economy, providing the ultimate condition for a unicorn startup.”
New Zealand “Wellington is a mini Silicon Valley.”
Peru “Offers an opportunity to solve structural problems of emerging nations, saving several years of trial and error.”
Russia “The US is the only other country with similarly strong digital talent and resources.”
Singapore “Is very diverse and technologically advanced. Has the right tools and mix of cultural influence in the region to bring a start-up company to success.”
Thailand “Strong government policies, that create support and benefits for digital-related activities.”
The Philippines “Has good GDP growth, lots of energy and is receptive of foreign culture, and is building up its infrastructure.”
Viet Nam “Has a vastly underserved consumer base, discerning customers, great skill sets and originality of ideas.”

Source: PwC’s APEC CEO Survey 2018


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Emily Church

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