Singapore Venture Funding Landscape 2023

Singapore Venture Funding Landscape 2023

James Tan penned a note for the concluding insights of the Singapore Venture Funding Landscape 2023 report by DealStreetAsia and EnterpriseSG.

Singapore, like most of the rest of the world, is a price-taker when it comes to global venture capital funding. Silicon Valley, which constitutes more than 50% of global venture capital funding, drives trends and valuations. So when it cooled significantly last year, funding around the world, including in Singapore, also cooled.

Every sector has been affected. If venture capital firms were not completely disinterested in looking at new deals then at least a cautious approach to new deal flow was seen. In 2023, venture capital firms would be in portfolio support – ensuring that their existing investees have the support and wherewithal necessary to tide through the difficult year.

Singapore’s resilience lies in its ecosystem, which recently leapt 10 spots from 18th to 8th globally. This ecosystem resilience is manifested in the interconnections between its different parts, where as a single startup, it is weak but as a collective of peer support from other startups, support from public sector, support from corporations, and support from institutions of higher learning, it is strong.

Despite the funding winter, when investors look at the broader landscape of Southeast Asia, they will see strong macro fundamentals – fast-growing economies with an emerging middle class. Investors would be wise to take a long term view of Southeast Asia. This is a region which has emerged from every difficult period stronger than before, including COVID-19 in which Southeast Asia, especially Singapore, bounced back from the pandemic faster than most of the rest of the world.

We are cautiously optimistic about the fundraising landscape in the next 12 to 24 months. Startups that have survived the funding winter would have found a strong base case for their business and should presumably fund-raise from a stronger position.

New emerging sectors of global importance will drive Singapore’s funding activities. These sectors include robotics, artificial intelligence, and quantum computing.

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