Singapore’s Startups Build on Established Global Success
Singapore is widely known as one of the top hubs for business and culture in Asia. Part of its reputation stems from the city-state being rated both as the second best country to conduct business globally and as one of the most competitive places to do business.
With this in mind, it may not be surprising to hear that Singapore is also one of the world’s top startup hubs as well. Startup Genome’s 2019 Global Startup Ecosystem Report rates Singapore as the #14 global startup ecosystem in the world and identifies Local Connectedness as one of its strongest traits. On top of a culture of founders helping founders, Singapore also has high quality talent that is relatively inexpensive compared to other top ecosystems.
Singapore helps grow young startups with its Startup Tax Exemption Scheme, which exempts 75% of a company’s first $73,000 in income. Additionally, Singapore raised tax deductions for IP registration fees from 100% to 200% and qualifying expenses incurred on R&D from 150% to 250% in 2018. Singapore startups are able to put off paying taxes until they are larger and more established.
While Singapore has many startups across various sub-sectors, Blockchain and Fintech have been especially notable in recent years. In the area of Blockchain, Singapore ranks third globally in size of initial coin offerings (ICOs), a sign that it is ahead of most ecosystems in this up-and-coming market. Additionally, in 2018, 82% of executives in Singapore reported that their organizations had started blockchain initiatives. One notable startup in Singapore’s Blockchain sub-sector is Fusion, a crypto-finance startup, which raised $110 million in an ICO in 2018 and subsequently secured $12.3 billion in financial assets on their platform.
In addition, Singapore’s Fintech startups are making great strides. Startups in this sector are being supported in innovative ways by the government. The Monetary Authority of Singapore introduced a Fintech regulatory sandbox program, opened a Fintech Innovation Lab, and launched a Fintech innovation village called LATTICE80. Also, the FinTech Office, a virtual entity for all Fintech related matters, was set up in 2016.
Singapore’s startup ecosystem has a global reach. It hosts the Singapore FinTech Festival, the biggest Fintech event in the world attracting more than 45,000 participants from 130 countries. One notable local Fintech startup is Credit Culture, a financial services provider that raised $30 million from RCE Capital in 2019.
- Startup ecosystem value of $25 billion, far exceeding the global average of $5 billion.
- Ranks as the #4 Global Startup Ecosystem in the Blockchain sub-sector.
- Ranks as the #5 Global Startup Ecosystem in the Fintech sub-sector.
- Early-stage funding per startup totals $202,000.
- Output Growth Index of 8 out of 10, indicating meaningful growth in total startup creation, calculated in an annualized growth rate.
Our local member is Enterprise Singapore. Their mission is to “work with committed companies to build capabilities, innovate and internationalise,” and to “support the growth of Singapore as a hub for global trading and startups.” The organization works side by side with startups and mid-size companies to figure out how to capture interest in new markets, adopt new technologies, and build leadership capabilities. Enterprise Singapore’s Scale-up SG program helps high-growth local companies scale rapidly through peer-learning and leadership development.
“Singapore and Silicon Valley share a unique quality, they are magnets for talent across the globe,” Vinnie Lauria, Managing Partner at Golden Gate Ventures, told us. “Magic is sparked when people from different backgrounds come together to solve a problem.”