FINANCIAL INSIGHT: VENTURE CAPITAL
Singapore’s COVID-19 resilience is attracting even more venture capitalists There is still plenty of uncertainity lingering around the world economy, but venture capital firms say Singapore offers a resilient new foothold for the sector.
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he COVID-19 pandemic continues to wreak havoc across the globe, yet whilst its disruption is still felt today, one could say Singapore is amongst the states that’s faring better during the crisis. And this, coupled with Singapore’s COVID-19 resilience package, has helped to encourage further venture capital (VC) firms to move to the region. The package, under the 2021 spending plan, covers additional funding support for businesses hardest hit by the pandemic. The Ministry of Trade and Industry has projected the economy will expand by 4%-6% in 2021, signaling that Singapore is well on its way to recover, albeit unevenly across sectors. The economy contracted by 5.4% in 2020, but the Government says this could have doubled to 12.4% had it failed to place enough fiscal and policy measures to mitigate the impact of the crisis. VCs move to Singapore Despite hurdles in startup investments in 2020, the VC scene is expected to expand in 2021. The first quarter of the year already saw Hong Kong based travel firm Klook raise US$200m under the Series E round from Aspex Management, Sequoia Capital China, and Softbank Vision Fund 1 amongst other investors.
Venture capitalists share insights on Singapore’s VC scene this year
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SINGAPORE BUSINESS REVIEW | JUNE 2021
The Singapore VC scene continues to thrive in 2021, especially benefitting from the stellar reputation in its COVID efforts
“The Singapore VC scene continues to thrive in 2021, especially benefitting from the stellar reputation in its COVID efforts,” KK Fund Co-Founder and General Partner Kuan Hsu told Singapore Business Review. “I have seen VCs travel to Singapore and base themselves here because they feel it is safer for them compared to staying in their home country,” he added. KK Fund started in 2021 with a $26.6m (US$20m) deal with Malaysian multibank supply chain finance company CapBay, under its Series A funding round. Capbay, also a peer-to-peer financing platform, is the first and only financial technology (fintech) company to partner with Telekom Malaysia for its vendor financing programme. Hsu added the 2021 budget, which covers the $11b COVID-19 Resilience Package that will partly extend assistance to businesses, will lead to more successful startups emerging from Singapore. Golden Gate Ventures (GGV) founding partner Vinnie Lauria also projects US-based investors to enter the Southeast Asian market, particularly in countries with resilient economies. “On a global scale, as an American in the region, I look at Southeast Asia and across the globe and how it compares to the US market,” Lauria said.
