E-107: What Makes Singapore So Charming To Investors?
Singapore is a venture capital magnet in Southeast Asia.?
It’s the region’s biggest tech ecosystem by venture capital investments. And it ranks fourth in Asia’s tech startup ecosystem, trailing behind China, India, and Israel.
Every year, it attracts the lion’s share of regional startup funding.
As per the recent data by research firm Tracxn, Singapore startups raised US$397 million in Q3 2024, down 26% year-on-year, amid the prolonged funding winter due to fluctuating global economic conditions. However, funding increased 9% compared to the previous quarter.?
Cautious investors preferred writing smaller checks, which reflected in seed financing jumping 56.5% year-on-year to US$80.3 million in Q3 2024.
Early-stage funding—Series A and Series B—dropped by 8% to US$237 million. Interestingly,?late-stage investments rose 48%, totaling US$80 million, compared to the previous year.?
At US$208 million, fintech startups raised the most funding, followed by enterprise applications, and retail. Regional players such as Wavemaker Partners, Antler, and Entrepreneur First emerged as all-time top investors in the city-state in the quarter.?
Overall, Singapore startups raised a total of US$2.6 billion in the first nine months of 2024, 37% less than last year, as per data from Dealroom.co .
On the bright side, buyout deals involving Singapore companies surged this year—solidifying the city-state’s position as the M&A hub in Southeast Asia. M&A turnover rose 29% to hit US$51 billion in the first nine months of 2024 over a year ago period, driven by the financial sector.?
Despite its ups and downs, Singapore remains an all-time favorite of founders and investors in Southeast Asia.
Why? It’s neither the region’s largest economy nor the fastest-growing one.
But it’s a developed economy, which makes it the most important market in Southeast Asia despite its small size.?
Singapore's monthly per capita income is US$5,957, the highest in the region. It's six times that of Malaysia, which ranks second in Southeast Asia with US$993 per capita income.?
The other stats are equally shining. Almost 96% of Singaporeans are connected to the internet, 98% have bank accounts, and 94% have a debit or credit card.?
All these numbers point to one thing—Singapore has the highest concentration of affluent consumers in Southeast Asia.?
In a recent report by Lightspeed , out of 6 million people in Singapore, 90% are power users, those who have high purchasing power, are convenience-focused, and are willing to spend more on comfort and experiences.
Moreover, Singapore has been focusing on developing tech talent, which has seen significant growth over the past decade, making it an attractive location for startups and investors. The presence of established companies like Grab and Shopee has further created a pool of talent for new ventures.??
Meanwhile, the city-state has supportive government initiatives aimed at promoting innovation and entrepreneurship. This includes its Tech.Pass visa program, which allows established tech entrepreneurs, leaders, or technical experts from around the world to come to Singapore, and the Research, Innovation, and Enterprise 2025 plan, a five-year initiative by the Singapore government to invest in R&D.
It’s not by chance that Singapore is a leader in deep tech innovation. The country is home to several successful deep-tech startups, such as Silicon Box and MiRXES.??
All in all, Singapore has a vibrant startup ecosystem, with a high number of successful companies and experienced founders. The country’s strong fundamentals, supportive policies, and thriving ecosystem make it a charming destination for venture funding.?
Given Singapore’s intensifying focus on AI, it is likely to continue attracting more and more VC money and drive innovation in the region.??
On that note, let’s dive into this week’s recap.?
Buzzing Deals
? Indonesian aquatech startup Aruna received about US$3.2 million from East Ventures, Vertex Ventures Southeast Asia & India, and others in its ongoing Series B funding round. Founded in 2015, Aruna offers an integrated fishery platform, connecting local fishermen to broader markets. It also develops advanced technologies for improving efficiency, sustainability, and productivity in the aquatic industry and promoting sustainable practices in Indonesia's aquatech ecosystem. The recent funding brings the total amount raised by the startup so far to US$103.2 million.?
? Malaysia-based cryptocurrency exchange Hata.io bagged US$4.2 million in seed funding, led by Cadenza Ventures and Castle Island Ventures. Other backers include Alliance DAO, Bybit, and Plug and Play Tech Center. Hata.io is a digital asset broker and exchange, with dual licenses from the Securities Commission Malaysia and Labuan Financial Services Authority, allowing the platform to serve both Malaysian and international users. The company plans to use the fresh money to expand its services and customer base in the Asian market.
? Singapore-based startup ConnectingDNA bagged US$550,000 in pre-seed funding. The names of the investors were not disclosed. Founded in 2021, the startup offers a DNA-based personalized health solutions platform, combining personal genetic data with actionable wellness solutions to provide users with personalized health recommendations. The platform also allows consumers to upload their DNA reports safely and privately to get intelligent insights, bespoke recommendations, and even DNA-personalized solutions so they can achieve positive lifestyle and health outcomes.
? Advance.ai’s Credit Bureau Philippines has obtained US$4 million in seed funding from Archipelago Capital Partners. Advance.ai is a fintech company that uses artificial intelligence for fraud prevention and process automation solutions. Advance.ai’s Credit Bureau Philippines provides credit information and data services. The bureau aims to assist fintechs and banks in promoting financial inclusion. Founded in 2016, Advance.ai has raised a total of US$330 million so far. The company will use the funds to support launching operations in the Philippines to enhance financial access with improved credit data.
? Singapore-based AI startup NextGenAI landed a US$342,000 pre-seed check from Picasso Fang of Asiawide Print Holdings. NextGenAI enables organizations with its cutting-edge technologies to produce content solutions designed for the digital age. The startup has also developed AI-powered tools designed to improve lead engagement and offer strategic guidance. With the new funding, NextGen.AI plans to boost its research and product development. It will focus on personalized knowledge-based models to grow its market presence in Malaysia, Vietnam, and Indonesia.
What Stood Out This Week
? CopilotIQ, the health tech company helping older Americans with chronic conditions live longer and healthier lives, and Singapore-born Biofourmis, a technology-enabled care delivery company offering in-home care solutions to enterprise healthcare customers, recently announced a strategic merger.
The combined company will provide cost-effective care for patients managing chronic conditions. CopilotIQ’s software suite for driving patient engagement, improving clinician efficiency, and delivering clinical personalization, will be integrated across Biofourmis’ offerings. Moreover, leading investors from both businesses, including General Atlantic, Openspace Ventures, and Bessemer Venture Partners will invest in the combined business.
? South Korea's second largest conglomerate SK Group acquired Vietnamese semiconductor manufacturer ISCVina Manufacturing Co Ltd for US$300 million. ISCVina, located in Ba Thien 2 Industrial Park, was previously fully funded by another South Korean company ISC Co Ltd.
The deal highlights SK Group's continued expansion in Vietnam. The company invested US$470 million for a 9.5% stake in conglomerate Masan Group in 2018 and led a consortium to invest US$1 billion in Vingroup a year later. It also invested about US$100 million in Pharmacity Pharmaceutical Joint Stock Company in 2022 and is a shareholder of PetroVietnam Oil Corporation. Last year, SK Group announced its intention to exit investments in Vingroup and Masan Group, aiming to secure over US$720 million.
? Mitsubishi Corporation is set to acquire a 50% stake in Ayala Corporation's AC Ventures Holding (ACV) for approximately US$323 million. This deal will give Mitsubishi half of ACV’s 13% share in Globe Fintech Innovations (Mynt), which operates GCash, the leading e-wallet in the Philippines with 90 million registered users. The acquisition follows a US$393 million investment from MUFG Bank in Mynt, raising its valuation to US$5 billion.?
Ayala expects Mitsubishi to support Mynt's international growth, particularly in Japan. Both companies have partnered since 1974 across various sectors, including renewable energy and industrial estates, with plans for future collaborations in retail and healthcare. For Mitsubishi, this fits its broader strategy to build a "Smart-Life" ecosystem, focusing on business initiatives that address social issues and meet consumer needs, with digital financial services as a key element.?
? Indonesia Battery Corporation (IBC) and a unit of China's battery giant Contemporary Amperex Technology Co (CATL) have formed a joint venture firm to build a battery cell manufacturing plant in Indonesia with an investment of US$1.2 billion.
The move is aimed at boosting battery production, supporting Indonesia's broader strategy, led by President Joko Widodo, to develop a full EV supply chain by leveraging the country's rich nickel reserves, a key material for batteries. Earlier this year Hyundai Motor Group and LG Energy Solution Ltd. opened the first-ever battery cell plant in the country, while China’s BTR New Material Group launched an anode material plant.
And that’s the wrap for this edition of #ICYMI, our weekly curated highlights from the Asian tech ecosystem. Subscribe to receive it every Thursday and stay updated on the noteworthy tech developments you might have missed during the week. Like this newsletter? Share it with your friends and colleagues here.