Singapore is known for skyscrapers and hawker food.
But now it's building a reputation for something else,
venture capital.
The city is using its financial clout to position itself
at the heart of southeast Asia's technology sector,
attracting funds, incentivising start-ups, and partnering
with global tech investors.
There are signs of success, such as e-commerce
and gaming platform Sea Group.
But there are also doubts that the city
has capacity to provide an exit for start-up investors.
Can a small city-state, however international
its outlook, really become a titan in the tech world?
Singapore is wealthy, thanks to its position
as an entrepot between east and west,
and its reputation as a reliable place to do business.
But controls on freedom of expression
and a reputation for conformity don't make it
an obvious base for a start-up.
However, about a decade ago the government
started investing in the sector with grants and government
sponsored tech incubators.
Now Singapore has more than 270 VC funds
and more than 4,000 tech start-ups
employing close to 22,000 people.
The city's reputation as a start-up hub
has improved, particularly in terms of funding,
but crucial elements, such as talent and knowledge,
lag other markets.
The city's biggest draw is its proximity
to the fast-growing economies of southeast Asia.
Chinese groups in particular have used this
to their advantage.
Chinese companies have already organically expanded
to southwest Asia because we're very similarly
in terms of culture, use cases, language, and way
of doing business.
Southeast Asia's tech boom has similar characteristics
to China in the early 2000s.
The first half of the move for consumer investing
is already gone in China, and now we
are seeing the first half or maybe, you know,
it happening in southeast Asia.
But Singapore's biggest draw, its proximity
to countries like Indonesia, is also
its biggest flaw, most tech companies based there
making money outside the city.
At a time of rising nationalism, having companies
that derive most of their profits
elsewhere is a political risk.
Singapore's highest profile start-up, ride-hailing app
Grab, originated in Malaysia.
And it has just opened a second headquarters in Jakarta,
to demonstrate the importance of its largest market.
In fact, most of southeast Asia's unicorns,
start-ups with a valuation of more than $1bn,
are from Indonesia.
We think that the ecosystem has been
plagued by very deep benchmarks of being a unicorn.
Away from those measures, like valuations and being labelled
with animalistic names, I think the important thing is to have
the stamina to run a long race.
We see that the companies that are looking for
are those that maintain themselves is a growing
concern.
Most start-ups today in Singapore
are consumer focused and based on relatively simple
technology.
Companies focused on deep tech, which
pushes the boundaries of existing technology,
are only just starting to emerge.
R&D always the focus of those who are rich, capable,
and have bundles of funds.
But today, deep tech requires a lot of people
to come together at one.
So I would say that deep tech developments will come out
of Singapore someday, but it will not be so soon.
A big hurdle has been the Singapore stock exchange
which has failed to attract big-tech names from the region
and suffers with low liquidity and valuation.
What's more, unlike in Silicon Valley or other fundraising
hubs, Singapore has not yet seen a significant number
of successful exits through public listings
or large-scale sale acquisitions, which
are a crucial part of the lifecycle of both
a start-up and a VC fund.
Singapore has used its advantages
to attract money and talent to its start-up sector.
But until investors see a reliable avenue
to cash out and win big, the city's plan
to become Asia's silicon valley remains a work in progress.