Singapore’s Startups Weather Turmoil With $10 Billion in Funding

Venture capital investors are flocking to Singapore despite uncertainty around U.S.-China trade relations, even as businesses hold back spending, according to Peter Ong, chairman of Enterprise Singapore.

Protracted trade tensions have not affected investor willingness to pump billions of dollars into young companies because their investment horizon goes beyond the current environment, Ong said in an interview on the sidelines of the city-state’s annual fintech festival. Funding for Singapore startups grew to $9.7 billion in the first nine months of 2019, a 28% jump from the total amount raised in all of 2018, according to Enterprise Singapore.

Venture capital has burgeoned in recent years in Singapore, where there are more than 150 funds, 100 incubators and accelerators, and 4,000 technology startups. Singapore joins other financial centers in promoting technology to boost competitiveness and innovation, with the central bank considering extending funding for financial-technology initiatives.

The trade war “has not dampened venture capital funding because when you invest, you are really not looking at the company’s condition today,” Ong said. “You are looking at three to five years down the line, and who knows how the environment will change.”

Curry and Ice Cream

A government agency, Enterprise Singapore provides financial and non-financial assistance to the country’s startups and small and mid-sized enterprises to help spur innovation and internationalization. Notable among its successes are Old Chang Kee Ltd., which makes curry puffs, and Udders Pte. Ltd., which makes ice cream with an Asian touch.

Ong said the standoff between the world’s two largest economies has mostly affected Singapore’s trade and manufacturing sectors and generally has led to “a period of uncertainty.” Singapore’s economy, which is heavily linked to global supply chains, narrowly avoided a technical recession in the third quarter.

Though the impact on startups has been minimal, “businesses, consumers, governments, prefer to plan under certainty,” Ong said.

London Calling

Similarly, another hot-button issue — Brexit — is not a major concern for young companies because it takes them on average five years before they can consider going public, according to Ong.

“The wonderful thing about when you do a startup is that you’re not worried about the current economic climate,” Ong said.

On Wednesday, Deputy Prime Minister Heng Swee Keat announced that Singapore has entered a partnership with a U.K.-based accelerator to help small and mid-sized companies and upstarts enter London and vice versa, an initiative supported by Enterprise Singapore.

The agency also is working on other initiatives to build Singapore’s startup ecosystem

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