Singapore’s Start-up Ecosystem – Part III: The Role of Venture Capital Funds

September 7, 2017

ASEAN Briefing

In the first and second parts of this three-part series on Singapore’s start-up ecosystem, we discussed how the city-state has emerged as a preferred base for international entrepreneurs and the opportunities it offered young overseas talent. In this concluding part, we look at the role of venture capital (VC) funds in nurturing entrepreneurship and innovation in Singapore.

Venture Capital in Singapore

VC funds will soon be regulated under a slimmer framework, as regulators seek to ease start-up firms’ access to funding. Indeed, the Monetary Authority of Singapore (MAS) published in February 2017 a consultation paper lining out its proposals for a simplified authorisation process and regulatory framework for these VC managers, which are now subject to the same rules as other fund managers.  MAS hopes the simplified regime will attract more VC managers to Singapore and spur them to play a greater role in supporting entrepreneurship and innovation.

Provided below are brief descriptions of some of the main VCs in Singapore:

500 Startups

500 Startups calls itself a new kind of seed fund and start-up accelerator. It believes successful internet start-ups are born from usable design, customer-focused metrics, and online distribution.

Latest investments: DayDayCook, KFit, Fabelio

Crystal Horse Investments

Crystal Horse Investments was founded in Singapore and is mainly involved in angel investments. It prefers to support founders who are passionate about their business ideas, realistic, hardworking, looking for an edge, thinking out of the box, and are ethical in their dealings. It has a team of full-time dedicated professionals who gives advice and support, such as providing funding, expertise, and networking to founders.

Latest investments: ProperHands Pte Ltd, Capital Match

East Ventures

East Ventures aims to bring success to ventures by providing early stage seed capital to promising start-ups. With a total of six offices in Jakarta, Tokyo, and San Francisco, its global team has invested in over 150 companies across Asia and the US. Its portfolio of companies focuses on commerce, social, game, SaaS, and mobile services. East Ventures runs incubation offices in Jakarta and Tokyo.

Latest investments: AlgoMerchant, Ruangguru, Sociolla

EDBI

EDBI is the corporate investment arm of the Singapore government’s Economic Development Board. It invests to shape the future industries of Singapore in the knowledge and innovation-intensive sectors of biomedical sciences, information and communication technology, and select industry clusters. It has over 25 years of investment experience, and through its portfolio of globally competitive companies with high-growth potential, it aims to promote the development, expansion, and transformation of successful industries to enhance economic growth and create employment opportunities in Singapore.

Latest investments: Coursera, CounterTack

Far East Ventures

Far East Ventures is the venture capital arm of property group Far East Organization.

Latest investments: Redmart

Golden Gate Ventures

Golden Gate Ventures focuses on companies building out consumer internet products and services for Southeast Asia. It prefers companies with a launched product or that have established valuable distribution partnerships in the region.

Latest investments: MyMusicTaste, Xfers, Aptoide

Innosight Ventures

Innosight Ventures leverages more than 20 years of applied research by innovation of thought leaders like Clayton Christensen and fieldwork by the Innosight Consulting Team. It has distilled that work into a set of proprietary tools that allow it to spot, shape, and scale successful start-up companies. Its usual investment quantum is up to half a million Singapore dollars in each company. It is also open to co-investing with other venture capital firms, when more capital is required. It has led investment rounds where companies have raised in the range of S$1 to 2 million.

Latest investments: Capital Match

Jungle Ventures

Jungle Ventures is a Singapore-based, entrepreneur-backed venture firm that funds and helps start-ups scale across Asia Pacific. It invests in global start-ups that are solving problems relevant to Asia Pacific markets. It has investments in US, Singapore, India, Australia, Thailand, Malaysia, and the Philippines. Current portfolio companies include micro-lending platform Milaap, mobile commerce app ShopSpot, and vacations rental site Travelmob which was acquired by Homeaway.

Latest investments: SnapBizz Cloudtech , Moglix, CatchThatBus

KK Fund

KK Fund is a venture capital fund investing in seed stage internet and mobile start-ups across South East Asia, Hong Kong and Taiwan.

Latest investments: Bfab

Majuven

Majuven is an early and growth stage venture capital fund founded by experienced business leaders in Singapore in 2012. One of its founding partners is Lee Hsien Yang, the brother of Singapore’s Prime Minister Lee Hsien Loong.

Latest investments: Paktor, Paraplou, Vela Asia

Pix Vine Capital

Pix Vine Capital is a Singapore-based investment house providing early-stage venture capital to start-ups in info-tech, med-tech and fintech.

Latest investments: ElastiMed

Qualgro Asean Fund

Qualgro Asean Fund is a venture capital fund investing in Southeast Asia and Asia Pacific. The fund invests in technology and digital businesses (marketplaces, web services, p2p platforms, C2C platforms), in SaaS-based business models, as well as in education and healthcare.

Latest investments: Mobikon, Wavecell

Rakuten Ventures

Rakuten Ventures is an early stage corporate venture capital fund focused on empowering the start-up ecosystem to positively affect Internet services globally. The fund was originally launched in 2013 and counts Carousell, Visenze, Coda Payments, and Send Anywhere among its investment portfolio. In June 2014, Rakuten Ventures launched a US$100 million global fund to target start-ups and companies in Israel, Asia Pacific, and the US, with a focus on companies that can enable better user experience. It is a subsidiary of Rakuten, a major Japanese ecommerce firm.

Latest investments: Send Anywhere

Singtel Innov8

Singtel Innov8, the venture capital arm of regional telco group Singtel, invests in and partners with tech startups worldwide. It has a fund size of US$250 million. Beyond funding, Singtel Innov8 lets startups tap on the resources and expertise of the Singtel Group, while enabling the Group to gain access to emerging technologies. Singtel Innov8 focuses its investments on technologies and solutions that can lead to quantum changes in network capabilities, next generation devices, digital services and enablers to enhance customer experience. Headquartered in Singapore, Singtel Innov8 also has offices in San Francisco and Tel Aviv.

Latest investments: ShopSpot, Teridion, DataTorrent

Sirius Venture Capital

Sirius a boutique venture capital and entrepreneurial finance firm, focused on small and medium-sized companies in Singapore and overseas. It was founded in September 2002.

Latest investments: Lalamove

Sequoia Capital

Sequoia is one of the top venture capital firms in the world. In Asia, Sequoia primarily invests in China and India start-ups at the growth stage and above.

Latest investments: KFit, Go-Jek

UOB Venture Management

UOB Venture Management Private Limited (UOBVM) is a wholly owned subsidiary of United Overseas Bank (UOB) Limited, an international banking and financial group.

Latest investments: Appier , Touchten Games

Public Involvement

Extensive government efforts to develop the eco-system have clearly made an impact. Singapore’s National Research Foundation (NRF) undertook a holistic study to identify weaknesses and gaps in the local entrepreneurial landscape and came out with programmes to foster the pioneering spirit in the city-state. Programmes such as the University Innovation Fund (UIF), Proof-of-concept (POC) grants, Early Stage Venture Capital (ESVF) and Technology Incubation Scheme (TIS) have helped to create a virtuous cycle of entrepreneurial activity over the years, complemented by various other initiatives from the Media Development Authority (MDA), Infocomm Development Authority (IDA) and SPRING Singapore.

SPRING Singapore

SPRING Singapore is an agency under the Singapore Ministry of Trade and Industry responsible for helping Singapore enterprises grow and build trust in Singapore products and services. As an enterprise development agency, SPRING works with partners to help enterprises in financing, capability and management development, technology and innovation, and access to markets. As the national standards and accreditation body, SPRING develops and promotes an internationally-recognised standards and quality assurance infrastructure. SPRING also oversees the safety of general consumer goods in Singapore.

TIS Programme

TIS Programme Data from the NRF showed that the roughly S$100 million allocated to investment schemes such as ESVF and TIS (as of March 2016) enabled supported start-ups to attract follow-on funding from private capital of almost S$400 million, giving an impressive leverage of four times the government’s outlay. An important outcome of TIS is that by providing the generous investment leverage and thereby greatly reducing investment risk, the government succeeded in drawing out a sizeable number of experienced local business executives as well as investors from the region to participate in TIS and become part of the start-up community. These high net worth individuals play a vital role as angel investors and mentors in various start-up programmes, significantly enriching the entire ecosystem.

University Innovation Fund

Similarly, the University Innovation Fund provided universities with substantial financial resources to aggressively step up their entrepreneurship efforts on campus. National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU) all saw a surge in start-up activity in the last few years. The NUS Overseas College (NOC) programme has sent thousands of students to intern in start-ups in Silicon Valley and other start-up hotspots, creating a large pool of NOC alumni that have dominated the local start-up scene in recent years. The student start-up grant provided under UIF has spawned many innovation projects in the universities, greatly expanding the funnel for new start-ups, which subsequently feed into the TIS and other seed funding programs.

Tags: asean, singapore, startups, venture capital funds
Posted in Asia, Wealth Management, Wealth Management