Investments in start-ups rise to $13.4b in Jan to Sept period

Start-up Igloohome's smart lock. The firm raised $21 million in a round co-led by venture capital firms Insignia Ventures Partners and Wavemaker Partners, as well as Enterprise Singapore's Seeds Capital.
Start-up Igloohome's smart lock. The firm raised $21 million in a round co-led by venture capital firms Insignia Ventures Partners and Wavemaker Partners, as well as Enterprise Singapore's Seeds Capital. PHOTO: GAIN CITY

Amount is 36% jump over same stretch last year, mostly in digital tech: Enterprise S'pore

Despite the slowing economy, funds invested in companies here rose by more than one-third in the first nine months of this year.

In all, about $13.4 billion from 437 deals was poured into the companies, a 36 per cent increase over the same period last year, Enterprise Singapore said yesterday.

The bulk of the funds was invested in start-ups operating in the digital tech industry, accounting for 93.2 per cent of the total funds raised. These investments were made across 278 deals, almost double the 145 deals struck in the same period last year.

Investments in deep-tech firms operating in three industries went up by 25 per cent to about $416.4 million between January and September this year. The trio are advanced manufacturing, urban solutions and sustainability, and healthcare and biomedical sciences.

But the funds raised in these industries made up less than 4 per cent of total capital invested, in part due to the current ecosystem's lack of lead investors with the expertise and experience to back deep-tech companies, Enterprise Singapore said.

Its assistant chief executive for innovation and enterprise Edwin Chow said more deep-tech companies are expected to be formed and they will require more early-stage venture funding to succeed.

The agency is looking to strengthen the start-up ecosystem here through partnerships with the private sector and other government agencies.

  • Some deals struck in first 9 months of this year

  • IGLOOHOME

    In July, smart home solutions start-up Igloohome raised $21 million in a round co-led by venture capital firms Insignia Ventures Partners and Wavemaker Partners, as well as Enterprise Singapore's investment arm Seeds Capital.

    NUTRITION TECHNOLOGIES

    Agri-food tech firm Nutrition Technologies closed a US$8.5 million (S$11.6 million) Series A round in July. The funds will be used to set up a commercial-scale insect protein facility which will be the largest in South-east Asia.

    It will produce more than 18,000 tonnes of insect-based feed ingredients and organic fertilisers every year.

    CAROUSELL

    In April, online marketplace Carousell raised $77 million from technology investment firm Naspers, which owns classified ads site OLX.

    It acquired OLX Philippines as part of the deal.

In June, a pilot programme that offers deal-making sessions to facilitate regional investments into start-ups was launched.

It is a joint initiative by Enterprise Singapore and the Monetary Authority of Singapore (MAS). Since then, about 200 start-ups have been linked with more than 150 investors from the region.

Mr Sopnendu Mohanty, MAS chief fintech officer, noted that investment in Singapore-based fintech start-ups crossed the $1 billion milestone in the first nine months of this year, a 69 per cent growth over the same period last year.

"The success of the digital ecosystem lies with Singapore establishing deep partnership with global markets and integrating into Asia's digital economic growth," he said.

Enterprise Singapore said regional and global funds have been raising bigger sums this year, and it foresees the trend continuing as the opportunities in South-east Asia grow with the rise of the Internet economy.

Venture capitalists that have launched new funds this year include firms like Jungle Ventures and Vertex Venture, as well as corporate-backed Reefknot Investments, a joint venture between logistics giant Kuehne + Nagel and Temasek.

Mr Chow said access to smart financing is essential for the development of deep-tech start-ups here.

"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," he added.

A version of this article appeared in the print edition of The Straits Times on October 18, 2019, with the headline 'Investments in start-ups rise to $13.4b in Jan to Sept period'. Print Edition | Subscribe