Asia’s tech startup scene may be young but it’s vigorous. According to a report by the McKinsey Global Institute, as of April 2019, Asia was home to more than one-third (119) of the world’s 331 ‘unicorns’ (startups valued at more than US$1b) — 91 of these companies are based in China, followed by 13 in India, six in South Korea and four in Indonesia.
The report states that much of this success is down to the region’s rich venture capital market. Asia is now among the top global sources and destinations for venture capital in fields such as virtual reality, autonomous vehicles, 3-D printing, robotics, drones, and AI.
Today, China ranks second only to the United States in terms of start-up investment. From 2014 through 2016, China provided just shy of 20% of the world’s venture capital. India isn’t far behind either, tripling Germany’s venture funding in 2018.
According to Oliver Tonby, chair of McKinsey in Asia, growing consumer demand is further contributing to Asia’s startup growth.
“We’re going to have more than a billion new consumers added to the population, which obviously drives demand. And the kinds of goods produced need to be tailored for India, need to be tailored for Indonesia, and so forth. This, again, creates a ton of opportunity,” he said.
By 2040, Asia is projected to top 50% of global GDP and drive 40% of the world’s consumption. 50% of global consumption growth is also projected to be in Asia, fuelled by the growing Asian middle class, which is set to hit 3 billion.
At the same time, they’re young, the median age in Asia is 30.7 years. Furthermore, they’re tech-savvy. Asia accounts for half of the world’s internet users. There’s little doubt this pool of digitally native consumers will further support innovation in the technology sector.