Emerging Tech Startups - Singapore Landscape Report

Insights and Outlook New steady state of startups incorporated - 60 annually 2019 was a record year for the number of emerging tech startups founded in Singapore (2019: 93). However, this has since moderated in recent years, and we foresee the number (including those yet to exit stealth mode) stabilising to around 60 annually. These incorporated startups will largely comprise graduates from either university entrepreneurship programmes, venture studios, dedicated accelerators or incubator programmes. Majority of the funding rounds shrank in size When compared to 2021, the number of deals dropped by 17%, with fundraising amounts decreasing by 28% in 2022. Among the startups that have fundraised, "extension" rounds (e.g. Seed extension, pre-A) were more prominent in 2022. Meanwhile, the average seed round size shrank for most verticals (Sustainability, Agrifood, and Advanced Manufacturing), potentially reflecting the declining valuations spilling over from the public markets. Diverging signals in early-stage Health and Biomedical Startups Despite the steady downtrend in newly incorporated health and biomedical startups, average seed round sizes doubled in this sector. These seemingly contradictory signals suggest that although investor interest in the biomedical space remains strong, systemic gaps (e.g. talent, funding, CDMO capacities) are limiting the pipeline of newly incorporated startups. This could result in a "winner-raise-all" scenario where a small number of startups raise larger rounds to draw from the same, limited pool of resources. Weathering the ongoing macroeconomic storm The US Federal Reserve funds rate hike and declining valuations in public markets will continue to loom over venture capital markets, which will impact growth-stage startups until there is a clear signal of a pivot. However, we believe that the local venture capital scene will continue to be active in the early-stage emerging tech space due to the influx of capital into the city-state and level of government support available. 6

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