Temasek shifts early-stage focus ‘a little more’ towards larger startups, after FTX and eFishery setbacks
Early-stage investments remain capped at 6% of Temasek’s overall portfolio
[SINGAPORE] Temasek is steering “a little more” of its early-stage investments towards startups at the Series C and D stages, following tighter due diligence standards introduced after the high-profile failures of eFishery and FTX.
The updated requirements include deeper integrity checks, a push for companies to be audited by the Big Four firms, and efforts to ensure that independent directors are in place to provide oversight, said chief investment officer Rohit Sipahimalani.
Early-stage investments remain capped at 6 per cent of Temasek’s overall portfolio. However, later-stage companies within this category are now receiving more capital.
With the larger startups, it is more realistic to ask them to have Big Four auditors or independent board members, said Sipahimalani.
“The levels remain similar in the last two, three years, but the quantum has shifted a little more towards Series C and D – (a) little later stage within that early-stage bucket,” he said.
He was speaking to The Business Times at the Singapore investment company’s annual Temasek Review, together with other senior executives.
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In late 2024, eFishery – one of Indonesia’s most prominent startups, backed by Temasek, SoftBank and others – was found to have inflated revenue and profit figures over several years.
Temasek also wrote off its US$275 million investment in cryptocurrency exchange FTX in November 2022. FTX founder Sam Bankman-Fried was sentenced to 25 years in prison in March 2024 by a US judge for stealing US$8 billion from customers.
The investment into eFishery took place before Temasek’s updated due diligence framework was fully rolled out, said deputy chief executive officer Chia Song Hwee.
Despite the risks, early-stage investments remain a necessary part of Temasek’s approach, he added.
Chia said: “Otherwise, we could be blindsided or surprised by (a) turn of events where our portfolio is not adequately positioned to deal with it.”
Early-stage exposure enables the firm to “look around the corner” and anticipate emerging technologies, he added.
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