Singapore is experiencing a surge in venture capital fundraising, reflecting growing interest in Southeast Asia’s startups.
This month, Vertex Ventures and two other venture-capital firms completed fundraising efforts in the city, each with their largest fund yet. In September, East Ventures, which made early bets on successful startups like Tokopedia and Traveloka, raised 30 million dollars that will go toward seed capital and early-stage financing.
Investors are putting money into the region’s venture firms as they seek opportunities beyond the US and China, the primary focus for Asia deals in recent years. Singapore’s government is providing incentives to attract entrepreneurs and venture capitalists – cutting regulatory red tape, protecting intellectual property and allocating public money for early investments.
“In the past decade, Singapore has invested heavily in the startup ecosystem,’’ said Paul Meyers, head of muru-D Singapore, Telstra’s accelerator programme. “As a result, we’re seeing more – and higher quality – startups appearing and getting funded.’’
The venture industry continues to be led by the US, which accounted for 21.5 billion dollars of the 39 billion dollars total invested in the third quarter, according to KPMG’s Venture Pulse Q3 2017 report. Asia is the second-largest region at 12.3 billion dollars, with China pulling in 10.2 billion dollars of that total.
Singapore venture investments totalled 725.3 million dollars in the second quarter of this year, boosted by Sea’s 550 million dollars funding round, according to KPMG. In the following three months, investments totalled 140.3 million dollars.
“The fact that significant upticks still occur testify to how the Singaporean startup scene still produces companies capable of attracting significant capital,’’ the report said.
Sea, a gaming company formerly known as Garena, went public in the US last week, raising 884 million dollars in its initial public offering. The Singapore-based company increased its share price and the number of shares available, signalling strong demand.
Some Singapore-based VCs are moving beyond seed and early-stage investing as startups grow in size. For example, B Capital Group, a VC firm that includes Facebook Co-Founder Eduardo Saverin, typically targets series B and C financing rounds of tech startups in the US, Southeast Asia and India. Vickers Venture Partners, which completed its fundraising at 230 million dollars last week, is “stage agnostic,” according to Chairman Finian Tan.
VCs in Singapore are luring funds from a wide range of investors including family offices as well as multinationals and conglomerates seeking to diversify their traditional businesses and get access to promising tech startups through their corporate VC arms.
Jungle Ventures’ SeedPlus, which targets early-stage deals in Asia, closed its first fund at S$25 million (18 million dollars) in April with backing from the investment arms of Fidelity International and Cisco Systems.
For its third fund for Southeast Asian and Indian deals, Vertex Ventures, which raised 210 million dollars this month, invited outside investors for the first time. Its corporate backers included Thailand’s Kasikornbank and Taiwan’s Cathay Life Insurance. Vertex has had two funds focused on Southeast Asia in the past, fully funded by parent Temasek Holdings, Singapore’s state investment firm.
“There is a huge market potential in Southeast Asia,” said JP Lee, partner and managing director of SoftBank Ventures Korea, which has backed Indonesia’s Tokopedia. “There is economic growth, government support and appreciation for talent. We plan to do more work there.” – Bloomberg