The US and Asia seem to share a complicated but symbiotic relationship when it comes to venture financing in their respective tech and crypto industries. While Asian funds are now flocking to the US in droves to fund new ventures in the tech and crypto scenes, their American counterparts are starting to notice the massive opportunities in the underinvested tech industry of the East as well.
America’s Crypto Scene Awash With Funds From Asia
Asians have arrived in the American crypto and tech industries. According to TechCrunch, Asian investors, which are primarily of Chinese origin, have been actively involved in early-stage crypto investing since 2017, and the trend seems to be getting more pronounced lately.
While US-based venture capital (VC) firms still lead the pack, their dominance is now being challenged by their Asian counterparts. Asian investors are getting more involved in venture financing that the gap between the two groups is getting slimmer.
Globally, investors spent a total of $154 billion to fund new ventures in 2017. American VC firms still remain the number one group, accounting for 44 percent of the entire amount. However, their Asian counterparts are certainly catching up with their 40-percent share. This is a surprising rise compared to the 5-percent share contributed by Asian VC firms 10 years ago.
US Firms Starting to See Opportunities in the East
Conversely, US firms are starting to get interested in VC opportunities in Asia as well. With its massive population, the Asian market as a whole is enormous, and there is massive potential, especially in its underinvested but still growing tech sector.
This massive venture capital opportunity is particularly noticeable in China. According to a report by the Global Times, there are 164 Chinese unicorns with a combined worth of around $628 billion, which highlights the massive investment opportunities for US-based VC firms. Unicorns, in the business industry’s parlance, are tech start-ups with over $1 billion market valuations. For comparison, there are only 132 unicorns in the US.
US firms are starting to take note of these opportunities and are now beginning to increase their presence in the region. A number of American VC firms have even established partnerships with their Asian counterparts to better take advantage of untapped market opportunities with the help of the local business scene.
Asia’s massive cryptocurrency industry also presents a massive opportunity for US-based firms. Spearheaded by the crypto-friendly nations Japan and South Korea, Asia as a whole accounts for a massive share of the global crypto trading volume, which explains why the world’s top crypto exchanges such as Binance, OKex, and Huobi are Asian based. In terms of crypto mining, Asia also leads the world with Chinese miners accounting for around 80 percent of the sector.