Singapore venture investments climb, with deep tech gaining some traction

Startups snagged SG$13.4 billion in funds between January and September this year, with early-stage funds almost doubling to SG$886.1 million and deep-tech firms in three sectors accounting for under 4% of total capital.

Venture investments in Singapore climbed 36% year-on-year to hit SG$13.4 billion during the first nine months of the year, during which startups inked 437 deals. Digital tech companies snagged the bulk of the funds at 93.2%, fuelled partly by the growing internet economy, closing 278 deals between January and September.

This was up from 145 last year or a 91.7% increase, according to the latest figures from Enterprise Singapore, a government agency dedicated to promoting local businesses in the global marketplace. 

Investments in the early-stage, deep tech startups,also were starting to gain traction, the agency said, pointing to advanced manufacturing, urban solutions and sustainability, and healthcare and biomedical sciences, in particular, as sectors that drew investor interest. These three market segments clocked 76 deals totalling SG$416.4 million, up 25% from SG$333.8 million last year. 

Singapore 'deep tech' startups face funding hurdle as risks higher

Because investment risks typically are higher and returns slower with startups that deal with deep technology such as artificial intelligence and medtech, venture capitalists in Singapore are less willing to stick their bets in early-stage startups.

Read More

The sectors, however, still accounted for just under 4% of total capital invested, noted Enterprise Singapore, which attributed the low representation to the current lack of lead investors with the expertise and experience to support deep tech startups. 

Assistant CEO for innovation and enterprise, Edwin Chow, said: "While the numbers are still small, it is encouraging to see emerging venture capitalist (VC) interest in the deep tech domains. Globally, we see that an ageing, wealthier population, as well as urbanisation and climate change will create a growing demand for new, innovative solutions. 

On the back of this, we expect to see more deep tech startups being formed -- be it through spinouts from our Institutes of Higher Learning or incubators and accelerators -- to address these needs," Chow said. "To succeed, they will require more early-stage venture funding."

Across the startup ecosystem, early-stage fundings almost doubled to SG$886.1 million across 304 deals, while growth-stage funds climbed 33% to SG$12.5 billion across 83 deals. 

Amongst deals closed this year were SG$138 million in Series D raised by local retail image recognition startup and newly-minted unicorn, Trax, and SG$77 million secured by C2C marketplace Carousell

Enterprise Singapore noted that regional and global funds had been closing bigger rounds and this upward trajectory was likely to continue as opportunities in Southeast Asia continued to grow with an expanding internet economy. It added that several VCs had introduced new funds in Singapore this year such as Jungle Ventures, Wavemaker, EV Growth, and Vertex Venture as well as corporate-backed funds including Reefknot, which was a joint venture between Kuehne + Nagel and Temasek Holdings.

Chow said: "Access to smart financing is essential to support the development of deep tech startups based in Singapore. We will continue to work with partners such as Monetary Authority of Singapore (MAS) to catalyse more smart monies into startups in deep tech domains. As we develop Singapore into a 'Global-Asia' node for tech, innovation, and enterprise, we need to build on the momentum to capture and catalyse more venture activities here."

Earlier this June, Enterprise Singapore and MAS piloted the Deal Fridays initiative to facilitate investments, providing some 200 startups access to 150 investors including VCs, angel investors, and family offices from the region. Some 15 meetups had taken place so far, generating at least 200 leads. 

MAS's chief fintech officer Sopnendu Mohanty revealed that investments in Singapore-based fintech startups exceeded SG$1 billion for the first nine months this year, up 69% percent year-on-year.

RELATED COVERAGE

Singapore 'deep tech' startups face funding hurdle as risks higher

Because investment risks typically are higher and returns slower with startups that deal with deep technology such as artificial intelligence and medtech, venture capitalists in Singapore are less willing to stick their bets in early-stage startups.

SGInnovate calls for more investors to put money in 'deep tech'

Singapore's government-owned venture firm wants Australian investors to join its cause and grow the deep tech space.

Singapore to offer dedicated accelerator for cybersecurity startups

Dubbed ICE71, the accelerator is set up by Singtel's VC arm Innov8 and National University of Singapore's NUS Enterprise, and will offer support to help local and foreign cybersecurity startups.

Singapore startups must now grow up, think bigger

Country's government has helped get things started, but Singapore entrepreneurs need to embrace risks and look beyond local shores to expand their products and services.

Singaporean and Sichuan firms ink partnerships in medtech and logistics

Singaporean medtech businesses are linking up with industry peers in Sichuan to enhance diagnostics and patient care, while local companies from other sectors look for opportunities in the Chinese province's transport and logistics sectors.