Yahoo Finance Funding for early-stage emerging tech start-ups in Singapore grew 59% last year: SGInnovate
Yet, fewer emerging tech start-ups were incorporated last year, reflecting the ongoing macroeconomic uncertainties.
Singapore’s early-stage emerging tech start-ups saw an uptick in funding in 2023, with total funding growing 59% year-on-year to reach US$402 million ($548 million) last year, according to SGInnovate.
However, fewer emerging tech start-ups were incorporated in 2023, with the current number observed standing at 25, in contrast to the 35 incorporated in 2022. While the final figure is likely higher as more incorporations from 2023 are uncovered, it is still expected to represent an overall dip compared to 2022; a reflection of the ongoing macroeconomic uncertainties which could lead to deferred incorporations.
Advanced manufacturing is among the verticals that have seen incorporations drop steadily since 2020. Despite a consistent output of high-quality research in this area, those start-ups face ongoing challenges in areas such as commercialisation and the availability of specialised talent.
On the flipside, start-ups in the agrifood and sustainability verticals performed strongly in terms of funding and incorporations. Funding events have grown year-on-year for both sectors, with agrifood start-ups securing 13 deals in 2023 (versus eight in 2022) and sustainability start-ups closing 16 deals in 2023 (as compared to 12 in 2022).
Sustainability is the only vertical to see a year-on-year increase in both funding events and funding amounts since 2021. This sector was the most active in terms of the number of start-ups incorporated last year, while average seed round sizes have also grown by nearly four times between 2022 and 2023.
As for the agrifood sector, its total deal count included seven undisclosed funding rounds, indicating that the full amount raised in 2023 is possibly higher than the current total of US$9.92 million.
Although the industry has seen a year-on-year dip in incorporations, longer-term data reveals that the agrifood industry continues to produce a steady stream of new companies. Among the industry’s 80 start-ups incorporated over the past five years, 39% are involved in alternative proteins or related enabling technologies, highlighting the vibrance of Singapore’s alternative foods space.
Start-up visibility trends and strike offs
SGInnovate’s Singapore Early-Stage Emerging Tech Startups 2023 report also looked at start-up visibility trends and strike offs to provide a better overview of each domain’s progress and the lifecycles of its start-ups.
It revealed that it can take up to three years to uncover the majority of emerging tech start-ups incorporated in a given year, suggesting a higher level of ecosystem activity than initially discovered. For instance, updated data in the current report has identified 93 emerging tech start-up incorporations in 2021. This prolonged discovery period may be attributed to a range of factors, such as founders’ preference to increase company visibility only after raising their first institutional funding round, or upon completing the development of their minimum viable product.
As for strike offs, the report found that approximately nine per cent of the emerging tech start-ups incorporated between 2019 and 2023 have ceased operations, with many expected to face the most acute risk of strike off from around their third-year post-incorporation. This is consistent with the additional 18 to 24 months of runway that a round of funding provides.
Among the various verticals studied, start-ups in the health and biomedical sciences and advanced manufacturing verticals accounted for around 47% and 28% of all strike offs respectively, emphasising the ongoing challenges faced by both sectors.
“The trends we are seeing are an indication of the maturity and growing dynamism of Singapore’s emerging tech landscape, with more specialist investors coming in to support specific verticals,” says Hsien-Hui Tong, executive director – Investments at SGInnovate.
He continues: “While challenges such as political uncertainty will continue to weigh on investment considerations globally, we are optimistic about start-ups addressing long-term concerns supported by policy initiatives in Singapore. These include technologies in areas such as remote patient monitoring and stem cell therapy, which may provide solutions to enhance the care of Singapore’s ageing population, or technologies that will aid Singapore’s continued efforts in decarbonisation, including battery recycling and sustainable materials production.”
See Also:
Click here to stay updated with the Latest Business & Investment News in Singapore
The importance of being transparent for a sustainable future
Huawei empowers partners to help realise a smarter and greener Singapore
Market to dictate speed at which Mercedes-Benz electrifies its portfolio
Get in-depth insights from our expert contributors, and dive into financial and economic trends
