Funds raised by Singapore’s tech startups up 59% in 2023

SINGAPORE: Singapore’s early-stage emerging technology startups raised Us$402mil in funding in 2023, up 59% from the Us$253mil raised in 2022, says national investment arm Sginnovate.

The number of seed-stage deals also climbed 50%, from 20 in 2022 to 30 last year, across four sectors – advanced manufacturing, agrifood and sustainability, as well as health and biomedical sciences.

This indicates a stronger appetite for emerging tech investments as the ecosystem continues to mature, Sginnovate said on Tuesday in its report on the sector’s landscape in 2023.

Sginnovate said it looked at early-stage startups from among firms incorporated between Jan 1, 2019, and Dec 31, 2023.

It defined emerging technology startups as firms that are developing tangible products, such as devices, machinery, instrumentation, food and pharmaceuticals based on physical sciences, life sciences and/or engineering.

“The trends we are seeing are an indication of the maturity and growing dynamism of Singapore’s emerging tech landscape, with more specialist investors coming in to support specific verticals,” said Sginnovate executive director Tong Hsien-hui.

The agrifood and sustainability sectors led the charge in terms of funding and incorporations, likely as a result of public and private initiatives.

Both areas saw year-on-year growth in funding events, with the agrifood sector securing 13 deals in 2023 compared with eight in 2022, and the sustainability sector closing 16 deals in 2023 versus 12 in 2022.

According to Sginnovate, the sustainability sector is the only domain to experience a year-on-year increase in both funding events and amounts since 2021.

It was also the most active sector in terms of start-ups incorporated in 2023, while average seed funding round sizes in the sector grew nearly 300% between 2022 and 2023.

While overall funding and deal counts have risen, the number of emerging tech start-ups incorporated in 2023 across the four sectors decreased from 35 in 2022 to 25 in 2023.

Sginnovate highlighted that while the final 2023 figure is expected to be higher as more incorporations from the year are accounted for, it still anticipates an overall decrease compared with 2022. This is due to persistent macroeconomic uncertainties, which will potentially cause deferred incorporations.

It also found that approximately 9% of the start-ups incorporated between 2019 and 2023 have been struck off.

“It is likely that early-stage emerging tech startups tend to face the most acute risk of a strike off from around their third year of operations – this is consistent with the additional 18 to 24 months’ runway that a company gets after a round of funding,” it said. — The Straits Times/ann

“It is likely that early-stage emerging tech startups tend to face the most acute risk of a strike off from around their third year of operations.” Sginnovate