Why investment company Temasek is building its own start-ups

In an increasingly digital world, investment company Temasek is taking a hands-on approach to scale its own AI and blockchain capabilities and tech-enabled ventures

Temasek AI pod lead Sng Ren Yeong
Mr Sng Ren Yeong, Managing Director, Artificial Intelligence Strategy and Solutions, Temasek, leads the company's AI pod in exploring the potential and possibilities of the technology. PHOTO: TEMASEK

Two years ago, Mr Sng Ren Yeong was faced with a tough career decision: Continue in an enriching role with Temasek’s portfolio development team, or go where few colleagues had gone before.

The science fiction fan, 43, chose adventure — leading Temasek’s fledgling pod of pioneers in exploring the potential and possibilities of artificial intelligence (AI).

Mr Sng, who holds a bachelor’s and a master’s degree in economics, is not formally trained in AI. When he decided to join the new team, he had to commit to learning about the technology, immersing himself in AI applications to understand how such algorithms present solutions to pressing business challenges — a journey he says continues today.

Why did he do it? Purpose, passion and potential, says Mr Sng.

“I am convinced that harnessing AI will be key to creating value in the future, but it must be coupled with domain-specific expertise,” he says. “That will generate better outcomes for businesses, societies, and a better world for all of us.”

Temasek’s AI pod is one of two experimental teams formed within the company to create new ventures and take them to market; the other focuses on blockchain.

Temasek Blockchain pod lead Pradyumna Agrawal
Mr Pradyumna Agrawal, Managing Director, Investment (Blockchain), Temasek, leads the company's Blockchain pod in building purposeful tech-enabled ventures. PHOTO: TEMASEK

Mr Pradyumna Agrawal, 42, took up the role of leading Temasek’s Blockchain pod for reasons similar to Mr Sng’s. Previously involved in the company’s fintech investments, he was intrigued by the potential of blockchain to disrupt or even reimagine completely new business models.

He started exploring the technology as part of the pod in 2018. A year later, he took the plunge — relinquishing his former role as a Director in Temasek’s financial services investment team.

“It was purely accidental for me; I wasn’t sitting there thinking about what to do with my career,” Mr Agrawal admits. “But that’s the interesting thing about Temasek. The company pushes you to try something different outside your comfort zone.”

Both men embody Temasek’s vision: To stay forward-looking and resilient, and seize opportunities to use technology to enable new, better solutions.

Today, technology touches virtually every facet of our lives, from the way we work to the way we discover new places to eat.

The pace of transformation has accelerated. A 2020 study by management consulting firm McKinsey and Company estimates that digital adoption in Asia-Pacific has sped up by about four years due to the pandemic.

Temasek believes that the use of data and technology will continue to change the way we work, affecting all sectors and companies.

Digitisation is one of four key structural trends that guide its investment activities, and shape how its portfolio is constructed over the long term.

The investment company created the two pods in 2018 after identifying AI and blockchain as “foundational technologies” that will enable worldwide digital disruption.

“In a lot of sectors, investing is the primary way in which we express our view,” says Mr Agrawal. “Here, we have chosen to build ventures instead, and it is driven by the fact that a lot of the ideas we had were not already in the market, so there really wasn’t enough to invest into.”

“Most people will not believe that investment firms can actually create new solutions,” Mr Agrawal says. “That’s what excites me. There is real purpose to what we are doing — and we’re the underdogs.”

Opportunities in technology

The two pods have made significant strides since they were formed.

The Blockchain pod has been building ventures that leverage blockchain-based technologies, such as Singapore-based tech start-up Affinidi, which focuses on portable and verifiable digital identities and credentials; Trustana, which helps democratise access to international import and export markets for SMEs; and India-based GoodWorker, which delivers job matching, upskilling and other services to blue-collar workers in the country.

The first two, Affinidi and Trustana, remain fully owned by Temasek, reflecting the company’s view that the success of such start-ups also depends on their access to long-term capital.

If you travelled overseas during the pandemic, you would have likely used one of Affinidi’s solutions without knowing it. Affinidi’s universal travel verification technology enables the verification of Covid-19 test and vaccination results from over 70 countries used for cross-border travel. To date, over 400,000 credentials have been verified by airlines and immigration checkpoints.

Meanwhile, the AI pod is focusing on opportunities to accelerate responsible AI solutions through strategic partnerships and investments, while fostering necessary dialogue on AI ethics and governance across the sector.

To encourage industry upskilling in this crucial space for example, the pod supported the Singapore Computer Society’s AI Ethics and Governance Certification Committee in developing and promoting professional training and certification.

Aicadium, founded by the pod as Temasek’s global AI centre of excellence, is also working with other companies to develop and scale AI solutions.

To Mr Sng, such endeavours represent the “best of the human spirit”.

“It is not just about emerging technologies, it’s also what’s behind it: Our willingness to take risks and overcome boundaries to imagine new concepts and solutions. That’s what really inspires me.”

Solutions for a better planet

Temasek, with a net portfolio value of $381 billion as of 31 March 2021, has been shifting its focus to invest in more tech-enabled solutions.

For example, its investments in financial services companies that are not banks grew from almost nothing in 2011 to nearly 10 per cent of its total portfolio in 2021. 

Temasek’s recent digitisation-led investments include US-based Flywire, a cross-border payment service platform, and UK-based wealth management platform, FNZ.

It is also supporting sustainable, tech-enabled solutions, such as that of geothermal energy firm Eavor. Eavor has developed a proprietary technology that enables it to turn the Earth’s heat into clean energy.

Beyond investing in and building solutions, Temasek is bringing like-minded partners together to catalyse new ideas.

It has created Partior, a global multi-currency digital payments network powered by blockchain, with financial services institutions DBS Bank and JPMorgan.

Partior aims to disrupt the traditional cross-border payments model — which it says is costly and time-consuming — using blockchain and distributed ledger technology for quicker, more efficient settlement of banking payments.

At the launch of Partior in April 2021, Mr Sopnendu Mohanty, Chief FinTech Officer, Monetary Authority of Singapore (MAS), called it a “global watershed moment for digital currencies”. It marked a move from pilots and experimentation to commercialisation and adoption of such currencies, he said.

Temasek is also helping to advance Singapore’s national AI strategy through Aicadium, its global AI centre of excellence. Under the National AI Programme in Finance, Aicadium is working with local fintech companies and banks to develop an AI platform — called NovA! — which generates insights on financial risks.

In its initial phase, the platform will help financial institutions harness AI to better assess the environmental impact of companies, and identify environmental risks.

Temasek is also stepping up efforts to tackle climate change. It has formed Climate Impact X (CIX), a global exchange and marketplace for quality carbon credits, with DBS Bank, the Singapore Exchange (SGX) and Standard Chartered.

CIX leverages innovative technologies such as satellite monitoring, machine learning and blockchain technology to enhance the transparency, integrity and quality of carbon credits, so they can deliver lasting environmental impact.

This is the last of a four-part series brought to you by Temasek

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