A surge in participation by startup companies this week, at a highlight of Asia’s biggest annual tech event, shows an increased reliance on young entrepreneurs to come with the IT industry’s strongest ideas for connected devices and artificial intelligence.
The InnoVEX segment of Taipei Computex 2018 brought together 388 startups, a term usually defined as founder-owned firms of three to five years old. That number is a jump from 272 at the same event a year ago. Venture capitalists, including at least one with half a billion dollars in investment funds, evaluated them one-on-one and at formal pitching events.
Startups are catching attention as inventors of Internet-of-things technology because there’s no market leader yet, said Jamie Lin, founding partner of AppWorks Ventures, a startup accelerator in Taipei. That technology refers to software and hardware that let computers or phones communicate with everyday devices such as cameras and alarm systems.
Some connections run on artificial intelligence, which means computerized processing of the data collected from those devices. That can mean making human-like decisions.
“Computers continue to morph and there are no dominant players in IoT,” Lin said. “That’s why they need startups and that’s what makes the show relevant.”
In software, by contrast, Google and Microsoft dominate markets worldwide. Apple and Samsung, among others, lead in smartphones.
Coinciding with the tech show this week, Lin’s accelerator, another like it and a Japanese venture capital firm are all holding their own events in Taipei this week for startups.
More than 20 billion things will be connected to the internet by 2020, up from 8.4 billion connected last year, market research firm Gartner forecasts. The number will pick up especially as 5G wireless services speed up connections.
By next year, Gartner anticipates, startup firms working with artificial intelligence will overtake Amazon, Google, Microsoft and IBM in “driving the artificial intelligence economy” for businesses.
Artificial intelligence, also known by its abbreviation AI, will reach a market value of $1.2 trillion per year by 2020 as investment triples between now and then, Forrester Research said.
“There’s a process, which is experimental — error and trial, error and trial – so there’s no one with a ready solution, and AI is so broad that one that can do it all,” said Tracy Tsai, a Gartner research VP in Taipei.
“With AI startups, they say ‘I’m focused, I just do some part of it and I do it well, and I do it attentively,’” she said. “For companies looking for a full solution, if you can show your part works, then they use it.”
Venture capitalists watching
Venture capital firms at the three-day InnoVEX show Wednesday watched a spread of mostly Asian startups with software and hardware ideas focused largely on connected devices. Healthcare and the management of drones were among the fields that companies said they could help with AI.
The show offered chances for startups to pitch their ideas to venture capital firms and accelerators, which are programs that show young firms how to improve their businesses.
Startup promotion authorities from 13 countries, including France and the Netherlands, also scanned the exhibition hall for Asian firms that might complement their own.
“What we care about the most is whether these startups or smaller firms have technology, so if it’s a just a business model only, they aren’t suitable for us,” said Amanda Liu, CEO of the Taiwan government-backed business accelerator StarFab. Her accelerator takes 10 to 15 of every 100 applicants. “They need to have products and their core competence must come from technology.”
Taiwanese firms are good at altering hardware specs, Liu said, and for technology ideal for businesses rather than individual consumers, Liu said. Taiwan positioned itself decades ago as a high-tech hardware manufacturing hub for much of the world.
Qara was one AI-dependent startup at InnoVEX. The 4-year-old South Korean developer with $1 million in venture capital funding uses an AI algorithm to predict the movement of stock and cryptocurrency markets. It has earned revenues of $1.5 million and reports a profit.
“Anyone can see the predictions powered by AI,” said Qara’s global CEO Katie Bomi Son. In terms of accuracy, she said, “Some are from 70, or between 70 to 90. Most of our information [comes] from the machine.”
Qara counts mostly companies as clients but it’s looking for a way to monetize the free app for common users.