Singapore sees fewer unicorns in 2022 as economic headwinds grow

Trade and Industry Minister Gan Kim Yong speaking at the Singapore Week of Innovation and Technology conference on Thursday. ST PHOTO: DESMOND FOO

SINGAPORE – New unicorns have been few and far between here this year amid a poor global economy that is hitting investor confidence and fund-raising prospects.

Only four unicorns – unlisted start-ups valued in excess of US$1 billion (S$1.4 billion) – have been minted, compared with 11 last year, noted Mr Peter Ong, chairman of trade agency Enterprise Singapore (EnterpriseSG), on Thursday.

The four are digital health company Biofourmis, digital solutions provider Coda Payments, marketing technology firm Insider and online interior design start-up Livspace.

Mr Ong told the Singapore Week of Innovation and Technology conference at the Resorts World Convention Centre: “The current macroeconomic climate has darkened considerably. Fund-raising and listings prospects are less favourable.”

But he also noted that venture funding in Singapore is still continuing at a healthy pace, with 517 deals worth $11.4 billion closed in the first three quarters of this year.

The number of deals is up 6 per cent compared with the same period last year, although the value of investments is lower than the $11.6 billion recorded then.

Mr Ong added that investors are now more attracted to early-stage start-ups, as opposed to those in the later stage of their development.

He said economic uncertainties may have caused later-stage investors to hold back, adding: “Later-stage start-ups may also be more prudently managing capital to extend their runways. Those who can hold out may prefer to delay fund raising to avoid devaluation.”

SunGreenH2, which uses proprietary electrolysis technology for green hydrogen production, is one early-stage start-up that secured funding this year.

Another is Equatorial Space Systems, which develops novel low-cost and eco-friendly hybrid-engine rockets that run on its patented fuel.

Mr Ong noted that reduced investor risk appetite and increased scrutiny on profitability are realities that all start-ups will need to face, given high inflation and rising interest rates.

The Government will provide support to start-ups and help them leverage opportunities in the region, he added.

Trade and Industry Minister Gan Kim Yong announced on Thursday that the Global Innovation Alliance (GIA) will be expanded to Abu Dhabi and Seoul.

The GIA was set up by EnterpriseSG in 2017 to help participants access overseas markets.

GIA’s presence in Abu Dhabi will be its first in the Middle East, said Mr Gan. The city will act as a gateway to the United Arab Emirates and other regional economies.

He added that the Seoul expansion followed a successful test run that had received steady interest from Singapore companies.

The two expansions means the GIA is now in 17 cities.

Mr Gan said: “This will further expand market access for Singapore enterprises, and drive a two-way flow of innovation and business collaborations.

“We will also expand and deepen our presence across emerging and developing markets, and sharpen sectoral focus across different regions, to support Singapore enterprises to grow globally.”

The programmes in Abu Dhabi and Seoul will run for 12 weeks every year and are expected to commence next year.

The aim is to support at least 30 Singapore-based start-ups and technology small and medium-sized enterprises in entering these markets over the next two years, said EnterpriseSG.

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