Singapore’s VC scene faces a “pretty decent” 2023: SGInnovate

Singapore’s tech start-up scene has been growing in recent years, and the city-state ranks seventh in the latest 2022 Global Innovation Index.

Ore Huiying | Bloomberg | Getty Images

Global venture dollars may have fallen in 2022, but Singapore’s state-owned tech investment firm is bullish on 2023.

“2023 is probably going to be a pretty decent year for venture capital in Singapore,” Hsien-Hui Tong, executive director of investments at SGInnovate, told CNBC’s Squawk Box Asia on Wednesday.

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In contrast to global markets in general, Singapore’s venture capital scene “is still very active,” Tong said. That’s because companies in the country are typically in the earlier, emerging stages of development and “there’s still a lot of liquidity left in the seed and Series A stages. There is a lot of capital there,” he added.

On the other hand, global markets tend to be in the ‘mature’ stages of Series B and C, where venture capital has ‘dried up a bit’.

A seed funding round — also known as an initial investment — is followed by various rounds known as Series A, B, C, and so on.

According to Crunchbase, venture funding for the first nine months of 2022 totaled $369 billion, down 25% year over year.

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“2022 was a good year for us, unlike some other asset classes. It’s been a good year for emerging tech startups, with many breakthroughs being made,” said Tong.

For example, the Singapore-based biotech company MiRXES launched a “T10 ultra-high-throughput sequencing platform” in Asia-Pacific last month that it said would aid in early disease detection and precision medicine.

And clean-tech company SunGreenH2, which raised $2 million in August led by SGInnovate, is trialling its materials at global electrolyzer manufacturers.

Tong added that Singapore was “sheltered from many impacts” of the global macroeconomic headwinds. As a result, Singapore “was probably able to build up its infrastructure a bit better”.

He also cited the energy sector as a sector to watch in 2023 given breakthroughs in nuclear fusion and hydrogen.

“Quantum technology is another area where I think there will be some significant announcements and breakthroughs,” he added.

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