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Smart Nation revs up startup ecosystem
ENTREPRENEURSHIP has officially "gone mainstream" in 2015, amid a significant volume of new venture capital, accelerator programmes and series funding for startups.
This vogue, observers tell The Business Times, is largely a result of Smart Nation - a nationwide initiative and an all-are-welcome rallying call for startups, researchers, government agencies and even corporates to huddle and co-create tech-powered innovations for improved urban living.
"The pivotal moment for me was seeing the prime minister endorse what so many people have been doing to build a startup ecosystem here," said Hugh Mason, chief executive of startup accelerator JFDI.
He was referring, of course, to Prime Minister Lee Hsien Loong's hosting of over 200 global founders, investors and corporate bigwigs at the launch of Founders Forum Smart Nation in April at the Istana. At the grandiose event (complete with a live dessert art demonstration by a local celebrity chef), Mr Lee had called on guests to join Singapore in discussions on Smart Nation challenges such as mobility and an ageing population.
Mr Mason said: "Smart Nation is much, much bigger than any of our largest enterprises. While the government can be an enabler, it's going to take the private sector working more closely together to find solutions to demographic and environmental challenges in all developed countries."
Making this work, however, will not be a walk in the park, he said, as Singapore has to identify not only a common approach to innovation that connects everyone's agendas, but also appropriate new legal frameworks and ways to harmonise the cultures of all participating organisations.
"We have begun something that I think could be very interesting," said Mr Mason. "So my prediction for 2016 is that of Singapore leading Asia in finding new methods to join the different elements of innovation in a way that could be very exciting and genuinely unique in Asia, if not the world."
Singapore has also deepened efforts to groom homegrown entrepreneurial talent this year, with local universities progressively "teaching entrepreneurship" and offering startup exchange programmes - formalising a new career path for graduates, said angel investor Leslie Loh.
To boot, IIPL (Infocomm Investments, the venture arm of the Infocomm Development Authority of Singapore) has rolled out a venture capital management associate programme to nurture talents "upstream of the ecosystem chain", in what is believed to be the region's first such talent development scheme.
But while savvy investors will add value to the ecosystem, software engineers and programmers are equally critical as they are scarce, said Isaac Tay, co-founder of on-demand grocery delivery service Honestbee. "I believe that the startup scene here can be better if more Singaporean engineers who are currently working in US-based startups, especially in San Francisco, return to work in startups here for the Asian market."
Honestbee, which in October bagged US$15 million in Series A funding, is one of over 300 Singapore startups that set out to raise funds in 2015 - making the year "stronger than ever" for entrepreneurship, said Vinnie Lauria, founding partner of venture capital firm Golden Gate Ventures. The best of these startups have gone as far as to "disrupt" traditional industries, even prompting incumbents to do better, he added.
NTUC FairPrice, for instance, has recently partnered Honestbee for the latter's grocery concierge service, in which an Honestbee personal shopper will pick out FairPrice items and deliver them to the Honestbee customer within an hour. Said NTUC FairPrice chief executive Seah Kian Peng: "We have been investing and will continue to invest more in the online channel as we expect this form of retailing to continue to gain traction and favour with customers young and old."
Online furniture stall HipVan, as well, is disrupting the IKEA model by delivering cheap designer furniture straight to one's home and doling out home decor inspiration. Interestingly, IKEA is now in business with delivery van startup GoGoVan to offer same-day delivery of its furniture.
Likewise, ride-booking app GrabTaxi (fresh from announcing an alliance with global players Didi Kuaidi, Ola and Lyft to take on Uber) continues to disrupt the taxi industry. Singapore's largest taxi operator Comfort has rolled out a vastly improved taxi-booking app, and is now partners with third-party ride-booking app Karhoo, which will launch here next year.
In truth, not all incumbents have been slow to innovate, said Wong Poh Kam, director of NUS Entrepreneurship Centre. "A large incumbent in a traditional industry that seems to have responded faster is SingPost, which has tied up with Alibaba to ride the growth of e-commerce delivery."
In May, the postal services firm became the first logistics partner of Alibaba's Merchant Delivery Scheme. In October, it announced that its Singapore Post Centre will be redeveloped into the first retail mall here that offers both brick-and-mortar shops and online shopping under one roof.
Corporate innovation has certainly caught on this year, JFDI's Mr Mason said, as more companies set aside funds for extracurricular innovation or investment in startups. Singapore Press Holdings (SPH) launched an accelerator programme to groom media startups. NUS Enterprise, with healthcare think-tank ACCESS Health International, partnered to develop businesses for ageing. Most recently, IIPL and Cisco teamed up to help corporates and startups jointly develop applications for Smart Nation.
Lim Chu Chong, head of SME banking at DBS, said corporates "have much to learn from startups" as they encourage staff to embrace the digital mindset. The bank conducted a total of 15 hackathons this year, resulting in 1,000 experiments involving founders and 250 senior bank staff. DBS also recently announced a S$10 million investment in programmes targeted at Singapore fintech startups.
Said Mr Lim: "We see ourselves as their long-term business partner. In order for the entrepreneurial landscape in Singapore to thrive, we see large companies like DBS playing an important role, from providing financing to sharing knowledge, resources and connections."
With DBS's support, fintech looks set to dominate another year in entrepreneurship. Said JFDI's Mr Mason: "There are massive opportunities for Singapore fintech companies that think laterally about what they can do to leverage the good reputation of the Singapore brand for the hundreds of millions of South-east Asians who are only just beginning to engage with financial services."
The people that banks have "traditionally ignored", he said, will be a fantastic growth opportunity.
For more of BT's year-in-review stories, visit bt.sg/review_15