Which Overseas Markets Are the Best for Taiwanese Startups? Unveiling Startups’ and VCs’ Mindsets on Market Selection

Going global has become an essential growth strategy for Taiwanese startups seeking to scale up. Yet with the vast global market, a critical question emerges: which foreign country should serve as the first entry point? For Taiwan startups with international ambitions, this is indeed a crucial consideration. Choosing the right overseas market is not only the initial step toward internationalization but also a critical factor influencing global success.

To analyze how Taiwanese startups make country-selection decisions, we draw on insights from our 2025 Taiwan Startup Go Global Report. The study is based on survey data from more than 300 startups and in-depth interviews with 20 leading venture capitalists in Taiwan. Our findings show a clear gap between the market choices of startups and those of VCs. The following sections present these insights in detail and analyze the underlying logic behind their decision-making. 

Japan Is Startups’ First Choice but the U.S. Is Favored by VCs

Our research shows that more than 30% of startups identify Japan as their primary overseas market, while over half of VCs rank the United States as the most important destination.

Interviews with venture capitalists reveal a strong consensus that the United States remains the most critical market, primarily due to its large market and position as a global leader in technology innovation. Brandon Chiang, Founder & Managing Partner at Addin Ventures, noted that over the past two decades—from the PC era to the rise of mobile internet—the U.S. has consistently produced world-leading technology companies such as Google, Meta, Uber, and Airbnb. Looking ahead, with the rapid adoption of large language models since 2023, he expects the U.S. to remain at the forefront of innovation and to generate the next wave of AI-driven unicorns. As Brandon emphasized, “If Taiwanese startups fail to enter the U.S. to capture these emerging opportunities, it would be a missed opportunity.”

On the other hand, 45% of VCs view Japan as an attractive market for Taiwanese startups. Our interviews revealed that the key advantages of Japan include geographic proximity, cultural alignment, social stability, and transparent regulation. According to our interview with Ryan Kuo, President at CDIB Capital Innovation Advisors, the Taiwan–Japan connection benefits from low cultural barriers and comparable levels of economic development, making market entry easier for Taiwanese startups.

Beyond these similarities, complementary dynamics also emerge. As Ryan noted: “Japanese firms often lack flexibility but possess strong infrastructure; Taiwanese startups are agile but limited in scale and market depth. Taiwanese companies entering Japan can therefore supply the speed and adaptability that Japanese businesses need.”

Ryan also highlighted several case studies. The most famous example is KKday, a Taiwanese travel platform that expanded successfully in Japan by leveraging the country’s role as Taiwan’s largest outbound tourism destination. Likewise, SaaS provider Crescendo Lab Ltd. gained traction in Japan due to its relatively underdeveloped cloud services sector, where Taiwanese products could secure a local advantage.

Many Startups Still Target China, but Investors Remain Cautious

Over 20% Taiwanese startups continue to list China as a primary market, but only 5% investors see it as a priority. While the scale of the Chinese market and language familiarity remain appealing to founders, investors are taking a more cautious stance. They point to rising geopolitical tensions, regulatory uncertainty, and economic headwinds as key risks — highlighting the structural challenges that make expansion into China increasingly difficult.

There Is No Single Best Market — Strategic Planning Is Key

Beyond the U.S. and Japan, nearly 40% of venture capitalists argue there is no universally “best” market for Taiwanese startups. Instead, they stress that success depends on decision-making rationale and thorough market analysis.

Several investors pointed out that many Taiwanese startups expanded into Southeast Asia simply by following peers or chasing trends, often without validating product–market fit. This “expansion for expansion’s sake” led to misallocated resources and weakened international competitiveness.Our analysis suggests the more important question is not which market is most important, but rather where can a product achieve the right market fit? While investors frequently favor the U.S., it is among the world’s most competitive ecosystems, attracting top global talent and imposing high entry demands. For Taiwanese startups, success will hinge on crafting clear differentiation strategies and defining competitive advantages before entering such markets.