Startups in Singapore kick off new year with a bang

Singapore

STARTUP activity in Singapore got off to a feverish beginning in 2015, building a momentum that seems unlikely to subside through the rest of the year, observers have told BT (INFOGRAPHIC: Feverish start to the new year).

In just the first two months, at least seven homegrown startups reported closing significant funding rounds, among them property site 99.co, which raised S$2 million in Series A from Sequoia Capital and Facebook co-founder Eduardo Saverin.

Tembusu Systems - known for bringing Asia's first Bitcoin ATM into Singapore - bagged S$1.2 million in bridge funding to boost its cryptocurrency-enabler platform, what is now its core offering after having recalled all four of its Bitcoin ATMs here.

Crowdfunding enjoyed a much needed boost; the Monetary Authority of Singapore (MAS) in February published a public consultation paper on securities-based crowdfunding, paving the way for equity- or lending- based crowdfunding platforms to get going and allow investors to pledge money to ventures in exchange for financial returns.

The Republic also saw several new entrants to the crowdfunding scene, including the Singapore Exchange (SGX) and Clearbridge Accelerator, which in late January unveiled a first-of-its-kind partnership to launch an equity-based platform here; Sniffr.sg, a crowdfunding site for design entrepreneurs; as well as FundedHere, an equity- and lending-based platform founded by Tembusu Partners co-founder Andy Lim.

"While we welcome the entry of new entrants, our wish is that these players adhere to the highest of professional standards and run fully legally-compliant platforms. The market is getting fatigued from fly-by- night operators," said Leo Shimada, founder of two-year-old platform Crowdonomic.com.

Reportedly Singapore's longest- running crowdfunding platform, Crowdonomic is set to launch a securities-based platform to "connect the region's best startups with global smart capital", championing Singapore as a hub for innovative venture financing, Mr Shimada shared.

Venture debt - a relatively new concept here, where lenders combine their loans with warrants or rights to buy equity - has gained much ground. In February, the government proposed for Budget 2015 a 50 per cent risk-sharing programme with banks to fund companies with "minimal collateral", while DBS unveiled its very own venture debt programme.

The inauguration of various startup spaces too added to the early buzz. Among these were the JTC LaunchPad at one-north, a five-hectare, three-block site along Ayer Rajah Crescent envisioned to be a vibrant startup cluster; the Welcome Centre at LaunchPad, a one-stop professional services centre managed by ACE (Action Community for Entrepreneurship); and BASH (Build Amazing Startups Here) at LaunchPad, described as the go-to place for tech builders, investors and innovators.

"All of these will create the foundation to significantly drive startup activities and entrepreneurship," said ACE chairman Steven Fang.

For the rest of the year, there is a wealth of activities being planned to help startups learn and partner global players, Dr Fang added. "Funding may also be more streamlined and meaningful, especially for growth companies seeking smart monies in later rounds of fundraising."

Jeffrey Paine, co-founder of venture capital firm Golden Gate Ventures, said as much: "It's a good time to be a founder in 2015 . . . startups in Singapore and the region are raising significant amounts of capital, making our region more enticing for investors large and small."

He added: "More large funding rounds will be announced for the rest of the year and (we will see) definitely more exits than last year."