Singapore emerging as regional startup hub
Singapore is emerging as a hub for startups hoping to expand in Southeast Asia.
Industry players say more entrepreneurs from around the region are coming to Singapore to seek funding, and that investment is rising in tandem with the growing number of startups choosing to develop products here.
Co-founders of security software Appknox, developed to detect and suggest solutions for security flaws in mobile applications, came to Singapore from India about three months ago to develop their idea, hoping to tap the availability of funding and expertise here.
“We have chosen Singapore because it’s one of the fastest growing startup markets. It’s well-connected to near regions and… the market is quite mature,” said Harshit Agarwal, co-founder and CEO of Appknox.
“Over here, we get access to advisors… We were able to meet more than 10 to 12 potential customers over here, and we were able to understand the requirements for them so it has helped us to build a product for the market.”
Appknox is one of 12 teams from around the world here to participate in a 100-day accelerator programme run by startup incubator Joyful Frog Digital Incubator (JFDI), which provides funding and support to entrepreneurs to develop their ideas.
The incubator has invested some S$25,000 in each team and supports them with mentorship and networking opportunities.
Industry players say there has been a trend of global entrepreneurs coming to Singapore to develop their products.
“In the past, we thought if you want to build a company for the US market, you have to move to California. But now, we’re seeing lots of entrepreneurs coming to Singapore to build a global business that’s not necessarily aimed at the US,” said Wong Meng Weng, chairman and co-founder of JFDI.Asia.
“I think we’re really becoming the startup hub of Southeast Asia. Our entrepreneurs have come from places like Indonesia, Malaysia, Philippines, Thailand, Vietnam, India, Australia, New Zealand, the US, France, and this batch, we’ve even had a team from Lithuania.”
Amid increasing activity in the local startup scene, investment in the technology segment has jumped in the last few years.
According to statistics from Asian Venture Capital Journal Research, venture funding for Singapore’s technology sector soared to more than S$2.1 billion last year from approximately S$35 million 2011, increasing by some 60 times, ahead of other countries in the region like Japan, South Korea and Hong Kong.
The first two years of JFDI’s accelerator programmes, which started in 2012, yielded 21 active startups. Based on a follow-up study, the teams have raised about S$9 million in seed funding and are now valued at S$36.1 million.
Investors say such programmes help them find viable startups with growth potential.
“There’s rapid growth of startups in the region. But to get good quality startups, that, for me, would be the first problem. The startups that graduate from the accelerator programme have been validated (and are) much more marketable and investment ready,” said Monthida McCoole, angel investor at Mentor Matters @ JFDI.Asia.
The investment arm of the Infocomm Development Authority, Infocomm Investments Pte Ltd, is exploring collaborations with other private entities to run more of such programmes, with the aim of building 500 Singapore-based startups in the next five years.