Singapore’s economy contracted by a reported 5.4% in 2020 in light of the impact of the COVID-19 pandemic. The pandemic has prompted management strategies as seen through the passing of the COVID-19 Temporary Measures Act 2020, and the further S$11 billion set aside in the 2021 Budget for the Covid-19 Resilience Package. Both are examples of the Singapore government’s efforts to offer impacted industry sectors relief from economic uncertainty in the current climate. Despite the challenges faced in the last two years, the climate has stirred growth and has resulted in a flourishing start-up ecosystem. This is, in large part, due to Singapore’s efforts in adapting to the given climate by way of taking advantage of growth opportunities.
The pandemic has shed light on gaps in the market that had yet to be fully explored. The telemedicine industry has witnessed substantial growth, altering the view that traditional medical care by way of hospitals and clinics are the only options by which one could access reliable and trusted medical care. The acceleration of the growth of telemedicine start-ups is seen through a large spike in demand for their services. This stems from a combination of private patients wishing to avoid potential exposure to COVID-19 in hospitals, as well as the Ministry of Health’s request for telemedicine providers to assist and reinforce the handling of Covid-19 patients recovering at home.
The digital health app, Speedoc, founded in 2017, saw its operations remain largely unaffected by the pandemic due to its classification of being an essential service under the medical sector, which allowed Speedoc to continue visiting and treating patients in their homes. Speedoc raised a reported S$6.7 million in Series A funding, allowing it to accelerate adoption of its telemedicine services domestically as well as enhance its personalised management services by utilising artificial intelligence and machine learning. The amalgamation of traditional and modern clinical pathways has shown increasing promise from the start of the pandemic, with early-stage venture capital firms maximising the potential success in supporting and raising funds for start-ups with technological advancement initiatives to solve real human problems that so many individuals have faced over the course of the pandemic.
Food Technology and Food Sustainability
Singapore’s start-up ecosystem has fostered the growth of food related enterprises. It is observed that digital food technology apps have seen a steady increase in use. Food delivery in South East Asia grew a reported 183% from 2019 to 2020, with Singapore generating US$2.4 billion in gross merchandise value, accounting for 20% of the South East Asian region. The online food ordering platform Oddle, founded in 2014, having raised a reported S$5 million in funds in three years since its inception, is an example of how food start-ups have managed to thrive despite the effects of the pandemic. Oddle has seen a reported increase of 500 restaurants signing up for its platform within the first three months of the pandemic in 2020, bringing the total number of restaurants using Oddle to a reported 1,500 in Singapore alone alongside the further 5,000 restaurants in the region.
Apart from metric measured growth, start-ups have also taken the opportunity to give back to the community to help alleviate the effects of the pandemic. Founded in 2020 during the onset of the pandemic, food technology company TiffinLabs launched a S$1 million restaurant relief fund with an aim to assist restaurants and bars to take advantage of underutilised kitchens to increase delivery profits. In addition, TiffinLabs also partnered with local charity Free Food For All under the #SGUnited banner to create the Food is Love Foundation. Under this initiative, TiffinLabs pledged 20,000 meals to low-income families and individuals who have experienced the economic repercussions as a result of the pandemic as well as donating an additional 10,000 meals to organisations and healthcare workers who are combatting the effects of COVID-19 on the ground.
Food sustainability has been an additional growing sector alongside the food delivery industry. Singapore state-investor Temasek Holdings has pivoted into entering the market of food sustainability and has begun encouraging the growth of sustainable foods and alternative proteins. Temasek has launched the Asia Sustainable Foods Platform, and alongside Singapore’s Agency for Science, Technology and Research, approximately S$30 million is reported to be dedicated to the Food Tech Innovation Centre. The primary aim of the Food Tech Innovation Centre is to work towards a tailored infrastructure as well as establish service offerings to food technology start-ups. Temasek’s Asia Sustainable Foods Platform has, amongst its goals, the provision of support to food technology start-ups throughout each stage of their growth cycle. It is reported that this covers support and guidance in areas such as research and development, advisory, manufacturing capabilities and strategic connections, exhibiting Singapore’s burgeoning interest in food technology related enterprises.
Government and Industry Support
Singapore’s supportive government policies and strong infrastructure have also spurred start-ups to emerge stronger from the pandemic. The Economic Development Board’s Enterprise Development Grant aims to assist companies to grow and transform through enhancing core capabilities, innovation and productivity and market access abilities. The grant funds up to 80% of a company’s digitalisation efforts and mainly funds qualifying project costs such as third party consultancy fees, software, equipment and internal manpower costs. Digitalisation has no doubt accelerated over the course of the pandemic as seen through the increase in online communications through platforms such as Zoom and BlueJeans. The grant offers businesses the opportunity to enhance and strengthen their capabilities in the digital sphere in order to accelerate growth to continue meeting growing industry standards.
Similarly, the S$125 million support package launched in April 2020 by the Monetary Authority of Singapore has also contributed to the resilient, adaptable approach Singapore has adopted over the course of the pandemic. The support package aims to strengthen capabilities in the financial services and financial technology sectors. There have also been key efforts from Enterprise Singapore, a statutory board formed to support small and medium enterprise development to continue to groom local talent alongside ensuring that harnessing foreign talented remains uninhibited by the pandemic. This was fostered through the Startup SG Founder program, a program that offers local talent the mentorship to reach their full capabilities, as well as the EntrePass program which allows foreigners to start innovative and venture-backed businesses in Singapore, thereby encouraging economic stimulation through the creation of jobs.
Fundraising in the Pandemic
There is recognition that early-stage fund raising is essential to the growth of start-ups. It is reported that Singapore saw 355 investment deals amounting to just over S$5.3 billion in 2021, a comparable increase to the 317 investment deals worth approximately S$3.4 billion in the same period in 2020. Amongst others, Enterprise Singapore has plugged this gap by identifying early-stage investors. Enterprise Singapore’s investment arm, SEEDS Capital, has appointed 13 new co-investment partners and is reportedly expected to capitalise over S$150 million worth of private money to continue to promote and strengthen the growth of the start-up landscape in Singapore.
The contribution of supportive government schemes and statutory boards alongside private and institutional investors has resulted in several newly minted unicorns (companies with valuations over US$1 billion) such as Nium, Carousell and PatSnap. Nium, a payments start-up serving businesses, became a fintech unicorn in Singapore after a Series D funding round of a reported more than US$200 million. Local online classified marketplace Carousell has also reached unicorn statutes after its latest funding round of a reported US$100 million. PatSnap, also a Singapore company which focuses on patent analytics, has similarly reached unicorn status after reportedly raising US$300 million in a Series E funding round. These newly minted unicorns further illustrate how Singapore’s start-up ecosystem has not been substantially negatively impacted by the pandemic, but rather, has continued to promote growth and flourish through these unprecedented times.
This momentum does not appear to be slowing with the US$40 billion Grab merger with Altimeter Growth Corp, a special purpose acquisition company, expected to be completed by the fourth quarter of this year. Grab has continued to operate despite the circuit breakers and restrictions affecting the coming and goings of individuals within Singapore as well as its other operating markets. Countries in which Grab operates has seen it remain as a key transportation service that has continued to grow despite overall physical movement of people across its operating markets being significantly limited due to government restrictions.
In light of all of this, it is clear that Singapore’s start-up ecosystem has emerged from adversity due to its resilient infrastructure which has led the local start-up ecosystem to continue to flourish in the last two years. Singapore’s strong foresight and ability to adapt to the overwhelming climate has allowed the country’s start-up ecosystem to continue to be resilient and robust and has continued to promote and foster economic growth despite the significant challenges and impact of COVID-19. This bodes well for the future and there is a realistic optimism that the ecosystem will grow from strength to strength.
Dentons Rodyk thanks and acknowledges Practice Trainee Dominique Yap for her contributions to this article.