Singapore’s venture capital scene looks set for a ‘pretty decent’ 2023, investment firm says

Technology

Singapore’s tech start-up scene has grown in recent years, and the city-state ranked seventh in the latest Global Innovation Index 2022.
Ore Huiying | Bloomberg | Getty Images

Global venture dollars may have dropped in 2022, but Singapore’s government-owned tech investment firm is optimistic about 2023.

“2023 is probably going to be a pretty decent year for venture capital in Singapore,” Hsien-Hui Tong, executive director of investments at SGInnovate, told CNBC’s “Squawk Box Asia” Wednesday.

Unlike global markets more generally, the venture capital scene in Singapore is “still very active,” Tong said. That’s because companies in the country tend be at the earlier, nascent stages of development, and “in the seed and Series A stages, there’s still lots of liquidity. There’s lots of capital there,” he added.

Global markets, on the other hand, tend to be at the “more mature” stages of Series B and C, where venture capital has “dried up a little bit.”

A seed funding round — also known as the initial investment — is followed by various rounds, known as Series A, B, C and so on.

Venture funding for the first nine months of 2022 totaled $369 billion, down 25% year on year, according to Crunchbase.

The Singapore government launched SGInnovate in 2016 to support the development of deep tech startups. Deep tech startups aim to address significant scientific problems.

Singapore’s tech startup scene has grown in recent years, and the city-state ranked seventh in the latest Global Innovation Index 2022.

For the first nine months of 2022, investments up to Series B rounds amounted to $5.5 billion Singapore dollars ($4 billion), an increase of 14% by volume and 45% by value, according to data from government agency Enterprise Singapore.

On the other hand, later stages — Series C and after — saw a 25% fall in funding value.

“2022 has been a good year for us, quite unlike some other investment categories. It was a good year for emerging tech startups where a lot of breakthroughs have happened,” Tong said.

For example, Singapore-headquartered biotech company MiRXES launched a “T10 ultra-high throughput sequencing platform” — which it says would help with the early detection of diseases and precision medicine — in Asia-Pacific last month.

And clean-tech company SunGreenH2, which raised $2 million led by SGInnovate in August, is conducting trials of its materials with global electrolyzer manufacturers.

Tong added that Singapore has been “sheltered from a lot of the effects” of global macro economic headwinds. As a result, Singapore has been able to “build up its infrastructure probably a little bit better.”

He also named energy as a sector to watch in 2023 in light of breakthroughs in nuclear fusion and hydrogen.

“Quantum technology is another area where I think there are going to be some significant announcements and breakthroughs,” he added.

Correction: This report has been updated to accurately reflect global venture funding for the first nine months of 2022. An earlier version misstated the figure.

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