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Media Releases
17 Oct 2019 Updated 21 Oct 2019

Venture investments in Singapore rise, with emerging interest in deep tech sectors

MR No.: 063/19

Singapore, Thursday, 17 October 2019

  1. Venture investments in Singapore continue to grow amid a slowing economy. Notably, Enterprise Singapore sees investments into early-stage, deep tech startups in Advanced Manufacturing, Urban Solutions and Sustainability, and Healthcare and Biomedical Sciences starting to gain traction, with investments in these three domains amounting to S$416.4 million across 76 deals from January to September 2019, up from S$333.8 million over the same period last year (+25%). Overall, a total amount of S$13.4 billion1 (+36%) was invested in startups across 437 deals from January to September 20192.

  2. The funding activities grew across all stages:

    1. Early stage3 funding almost doubled over the same period to S$886.1 million across 304 deals;

    2. Growth stage4 funding amounts increased 33% to reach S$12.5 billion in 83 deals.

    Investments in deep tech domains starting to gain traction


  3. Whilst investments in startups in the three domains of Advanced Manufacturing, Urban Solutions and Sustainability, and Healthcare and Biomedical Sciences are beginning to gain traction, they made up less than 4% of the total capital invested, in part due to the current ecosystem’s lack of lead investors with the expertise and experience to back deep tech startups.

  4. Said Mr Edwin Chow, Enterprise Singapore’s Assistant Chief Executive Officer for Innovation and Enterprise, “While the numbers are still small, it is encouraging to see emerging 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. To succeed, they will require more early-stage venture funding. ”

  5. The deep tech startups are from diverse backgrounds, including global startups raising capital here, and startups founded locally by researchers and graduates from Singapore universities and research institutes, who leverage locally-produced intellectual property. Such startups are backed by proprietary technologies that cannot be easily replicated, allowing them to scale and compete globally.

  6. Data for the deep tech domains showed that in the first three quarters of 2019:

    1. Startups in Healthcare and Biomedical Sciences received about S$148.3 million in investments. Within this domain, investments in pharmbio and other medtech startups reached S$21.4 million, while investments into digital health startups reached S$126.9 million.

    2. In the Urban Solutions and Sustainability domain, investments reached S$150.4 million, up from the S$96.6 million in the same period last year (+56%). This can be attributed to increasing attention on cleantech and sustainability. Specifically, the growing interest in agri-food tech startups spurred investments in this sector, with the amount reaching S$28.3 million, up from S$0.75 million last year. This is in line with the government’s push to develop Singapore into a leading food and nutrition hub in Asia. SEEDS Capital, Enterprise Singapore’s investment arm, appointed seven co-investment partners in January this year to catalyse more than S$90 million worth of investments into agri-food tech startups.

    3. Startups in Advanced Manufacturing secured S$117.8 million in investments, up from the S$84.4 million in the same period last year (+40%).

  7. Investments into digital tech startups5 continued to climb, accounting for 93.2% of the total quantum, in part due to the growing Internet economy6. The number of investments made in digital startups reached 278 deals, up from 145 deals during the same period last year (+91.7%).

  8. Mr Amit Anand, Co-founder of Jungle Ventures said, “We have seen considerable investment conviction that greatly underscores the growing momentum for startup investments to be injected into the Southeast Asia region. Our capital allocation into deep tech startups has grown over the years and we expect this trend to continue.”

      

  9. Working with partners to enhance the startup ecosystem

  10. Regional and global funds have been closing bigger rounds this year. This trend is poised to continue as the opportunities in Southeast Asia continue to grow, with the rise of the Internet economy. Several venture capitalists (VCs) have launched new funds in Singapore this year, including early-stage and growth-stage funds such as Jungle Ventures, Wavemaker, EV Growth and Vertex Venture; and corporate-backed funds such as Reefknot, a joint venture between Kuehne + Nagel and Temasek.

     

  11. Mr Marc Dragon, Managing Director of Reefknot Investments, which is headquartered in Singapore, said, “With Reefknot’s focus on Logistics Technology and Trade Finance startups, and with Singapore’s strong global position as a trade, logistics and financial hub, we believe this is naturally a good location for us to anchor our operations.”

     

  12. Enterprise Singapore will continue to strengthen Singapore’s startup ecosystem through closer collaboration with different players, especially to encourage deep tech funding.

    1. Startup SG Equity – This helps catalyse financing for nascent sectors through government equity co-investment with the private sector. In the first three quarters of 2019, SEEDS Capital and SGInnovate, administrators of Startup SG Equity, invested in 56 deals. This catalysed S$160.5 million of private sector monies into various sectors through their appointed co-investment partners.

    2.  Deal Fridays – Enterprise Singapore and the Monetary Authority of Singapore (MAS) piloted this joint initiative in 2019, offering carefully curated deal-making sessions to facilitate regional investments into startups. Started in June, it has provided over 200 startups with access to more than 150 investors including Venture Capitalists (VCs), Corporate VCs, family offices and angel investors from the region. To date, 15 sessions have concluded, generating more than 200 leads7. More sessions will be held during the Singapore FinTech Festival and the Singapore Week of Innovation and TeCHnology (SFF x SWITCH) in November.


  13. Mr Chow added, "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 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."


  14.  Mr Sopnendu Mohanty, MAS Chief FinTech Officer, said, "Singapore’s growing tech-driven ecosystem strongly echoes our financial sector’s FinTech growth. Investment in Singapore-based FinTech startups crossed the S$1 billion milestone for the first nine months of 2019, growing 69 percent year-on-year8. The success of the digital ecosystem lies with Singapore establishing deep partnership with global markets and integrating into Asia’s digital economic growth."


    1 The numbers were generated based on data from Pitchbook, AVCJ, Crunchbase and Enterprise Singapore’s data (duplicates across sources were removed). This includes the S$6.6 billion raised by Grab in its Series H round according to Pitchbook. These are monies raised in Singapore through equity financing, including mergers and acquisitions (M&A).

    2Investments in 2018 reached S$10.5 billion (353 deals) in the whole of 2018. Note that this number has been revised to remove duplicates.

    3 Refers to seeds and series A deals for sectors.

    4 Refers to series B and beyond, including M&A.

    5 Includes companies in ICT (including fintech), media and telecommunications.

    6 Based on Google Temasek e-Conomy SEA report 2019, the gross merchandise value (GMV) for the Internet economy has grown from US$32 billion in 2015 to US$100 billion in 2019. It has been projected that the GMV will continue to rise to US$300 billion by 2025.

    7 Leads are defined as the investor-startup conversations that Enterprise Singapore and MAS are aware of or have facilitated.

    8 “Singapore FinTech Fundraising Raises Sharply in 2019 to Date”, Accenture, 15 October 2019: https://newsroom.accenture.com/news/singapore-fintech-fundraising-rises-sharply-in-2019-to-date-driven-by-spike-in-average-size-of-payments-and-insurtech-deals-accenture-analysis-finds.htm

 

ANNEX: Examples of deals conducted in Singapore this year

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For media enquiries, please contact:


Ms Ong Shi Man
Assistant Business Partner
Corporate Communications
T: +65 6279 3849
E: ONG_shi_man@enterprisesg.gov.sg

Ms Cheng Kiat Loon   
Deputy Director
Corporate Communications
T : + 65 6443 4465
E : CHENG_kiat_loon@enterprisesg.gov.sg

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