For some time now, Singapore has been pulling out all possible stops in order to build its very own Silicon Valley that would act as a startup hub for the entire Southeast Asian region. This decision might have been influenced by the recent acquisition of WhatsApp by Facebook for $19 billion. Technology entrepreneurs and policy makers in Singapore believe that their own homegrown startups have a chance of being acquired by one of these global tech giants one day. This can be reiterated by the fact that Singapore’s venture capital investment scene outperformed those in Hong Kong, South Korea and even Japan.
The recent years have also seen the Singapore government eagerly funding local technological innovations. The government has so far invested over S$100 million (around US$79 million) of the S$16 billion it had set aside for scientific research and development, in early stage startups from across the country.
The number of startups in the country attracting potential investors has also increased over the past few years. Examples include the video site Viki, which was bought by Japan based Rakuten Inc. for $200 million, and the online grocery and delivery service that managed to raise over $10 million in funding rounds from investors like Eduardo Saverin, Facebook’s co-founder.
The venture capital amount invested in Singapore based tech firms reached nearly $1.71 billion in 2013. This may be behind China’s $3.46 billion, but is well ahead of other countries like South Korea, Hong Kong and Japan. Funds allotted to Singapore tech firms from the government as well as international VCs also escalated to 19% of the total funding for Asia, a dramatic increase from the 0.3% in 2011.
Experts believe that the value of Singapore based startups generally increases at the time of exits, i.e. when they either sell their stocks to the public or are acquired by larger companies. The previous year alone saw over 20 Singaporean tech firms exiting, generating over $400 million as opposed to the $50 million that was generated by stock selling or acquisitions before that.
Some of the other highlights that make Singapore very attractive for startups include the rule of the law, excellent infrastructure and facilities, easy access to resources, and very quick access to local as well as international markets.
With all these factors backing it, many believe that the next biggest tech innovation (like WhatsApp or Instagram) could very well be launched in Singapore itself.
Summary
Singapore is trying its best to become Southeast Asia’s Silicon Valley for startup entrepreneurs in the region. Factors like government support, increased interest of potential investors, high value of startup exits, and easy access to resources and markets are some of the driving forces behind this decision to possibly launch the world’s next biggest startup from Singapore.
