The Star Malaysia - StarBiz

Singapore venture capital surges as startups seek room to grow

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SINGAPORE: Singapore is experienci­ng a surge in venture capital fund-raising, reflecting growing interest in South-East 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 US$30mil 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 Corp’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 US$21.5bil of the US$39bil total invested in the third quarter, according to KPMG’s Venture Pulse Q3 2017 report. Asia is the second largest region at US$12.3bil, with China pulling in US$10.2bil of that total. Singapore venture investment­s totalled US$725.3mil in the second quarter of this year, boosted by Sea Ltd’s US$550mil funding round, according to KPMG. In the following three months, investment­s totaled US$140.3mil.

“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 US$884mil 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 Inc co-founder Eduardo Saverin, typically targets series B and C financing rounds of tech startups in the US, South-East Asia and India.

Vickers Venture Partners, which completed its fundraisin­g at US$230mil 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$25mil in April with backing from the investment arms of Fidelity Internatio­nal Ltd and Cisco Systems Inc. For its third fund for South-East Asian and Indian deals, Vertex Ventures, which raised US$210mil this month, invited outside investors for the first time. Its corporate backers included Thailand’s Kasikornba­nk Pcl and Taiwan’s Cathay Life Insurance Co.

Vertex has had two funds focused on SouthEast Asia in the past, fully funded by parent Temasek Holdings Pte, Singapore’s state investment firm.

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