Taiwan has been eager to hatch its own unicorns to join the ranks of global US$1billion companies.
However, this is not happening. Gogoro Inc and Appier Group Inc, two local start-ups with the best potential to become home-grown unicorns, have pursued overseas initial public offerings (IPO) to raise funds for expansion.
To provide easier access to the local capital market, the Taiwan Stock Exchange and Taipei Exchange in July launched two new share trading platforms — the Taiwan Innovation Board and the Pioneer Stock Board — for start-ups to trade their shares. The new boards are proving unappealing to local start-ups amid rigid regulation and a smaller market scale, setting back Taiwan’s efforts to develop unicorns.
Electric scooter maker and battery swapping system provider Gogoro last week announced its IPO on the NASDAQ. With a valuation of US$2.35 billion, Gogoro is to become the latest local start-up joining the unicorn club. The Taoyuan-based company is set to list its shares in the US via a merger with special-purpose acquisition company (SPAC) Poema Global Holdings Corp in the first quarter of next year.
Gogoro is to add US$550 million to its balance sheet together with a private investment in public equity, a huge and unthinkable venture for locally listed companies.
Six months ago, Appier, an artificial intelligence software developer, raised ¥29.8 billion (US$272 million) by debuting its shares on the Tokyo Stock Exchange Mothers market, aiming to cater to its Japanese customers.
A major reason Appier and Gogoro forwent the local stock exchange and opted for Tokyo and New York to launch IPOs was the low valuation local investors give to start-ups, given their poor financial performance in the budding stage. Making money is not the priority of such firms, and they barely generate any revenue even upon IPO launches.
Local investors are mostly conservative and lack appetites for start-up stocks. They prefer stocks with stable returns and have a low tolerance for unprofitable companies. Foreign investors, on the other hand, have deep pockets and are more willing to bet on companies that might have excellent growth potential in the long term.
Gogoro, 10 years old, has not yet turned a profit. Appier just swung into a monthly operating profit in June for the first time since 2013, with its gross margin improving to 50 percent from 42 percent last year.
High qualification ceilings for investors set by the Financial Supervisory Commission could also be a factor that stops start-ups from debuting shares locally. Retail investors are restricted from investing in shares listed on the newly launched boards. Only qualified investors are allowed to buy shares listed on the new trading platforms, given the higher risks in investing in those start-ups.
Institutional investors, or venture funds, are naturally qualified to trade those shares. Otherwise, investors interested in those start-ups are required to hold assets of NT$10 million (US$360,542) to NT$50 million, depending on their assets, experience and income.
So far, not a single company has listed its stocks on the Taiwan Innovation Board, as it takes at least six months to complete the IPO review process. Lin BioScience Inc has pulled back its share offering plan on the board and considers trading shares of its subsidiary, Belite Bio Inc, via a traditional IPO, SPAC or on overseas stock exchanges.
To provide a fast track to the local capital market and to revitalize local stock markets, the stock exchange regulator should consider relaxing the rules governing share listings and investor qualifications. Otherwise, Taiwan risks losing start-ups with valuable innovation and core technologies to overseas markets and should expect the fallout of a talent exodus.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations