Singapore’s VC scene looks set for a “pretty decent” 2023: SGInnovate

Singapore’s tech start-up scene has grown in recent years and the city-state ranked seventh in the latest Global Innovation Index 2022.

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Global venture capital dollars may have fallen in 2022, but Singapore’s public technology investment firm is bullish on 2023.

“2023 will probably be a pretty decent year for venture capital in Singapore,” Hsien-Hui Tong, executive director of investments at SGInnovate, told CNBC’s “Squawk Box Asia” on Wednesday.

Unlike global markets more generally, the venture capital scene in Singapore is “still very active”, Tong said. That’s because companies in the country tend to be in the early stages of development, and “at the seed and Series A stages, there’s still a lot of cash. There’s a lot of capital there,” he added.

Global markets, on the other hand, tend to be in the “more mature” Series B and C stages, where venture capital has “dried up a bit”.

A round of seed funding – also known as an initial investment – is followed by various rounds, known as rounds A, B, C, etc.

Venture capital funding for the first nine months of 2022 totaled $369 billion, down 25% year-on-year, according to Crunchbase.

2023 could be a 'decent' year for Singapore venture capital: government-owned tech organization

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“2022 was a good year for us, unlike some other investment categories. It was a good year for emerging tech startups where a lot of breakthroughs happened,” Tong said.

For example, Singapore-based biotech company MiRXES launched a “T10 ultra-high-throughput sequencing platform” – which it says will aid in early disease detection and precision medicine – in Asia-Pacific last month.

And cleantech company SunGreenH2, which raised $2 million led by SGInnovate in August, is conducting trials of its materials with global electrolyser makers.

Tong added that Singapore has been “insulated from many effects” of global macroeconomic headwinds. As a result, Singapore was able to “probably build its infrastructure a bit better”.

He also singled out energy as a sector to watch in 2023 in light of breakthroughs in nuclear fusion and hydrogen.

“Quantum technology is another area where I think there will be some major announcements and breakthroughs,” he added.

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Correction: This report has been updated to accurately reflect global venture capital funding for the first nine months of 2022. An earlier version included incorrect figures.

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