Startup ecosystem is mature and vibrant. This is due to concentrated efforts
- To improve the support system,
- Interest from venture capitalists and
- Mentorship programs run by educational institutions and companies
to nurture and steer the startup scene to its present position.
Improved access to funding
The gaps are now well recognized that are challenging early stage companies.
The venture debt risk-sharing program is a groundbreaking effort to help small but high growth startups. This is a highly targeted funding scheme for startups that lack financially sound founders.
Under the program, along with select financial institutions can provide 50% risk shared venture financing. This is an effective alternative to traditional bank loans that calls for strong collaterals.
This enhanced access to funding will empower smaller startups and early stage startups to muster the financial resources needed to fuel their initial stage.
Some pre-seed stage startups should essentially bootstrap to evolve into qualified candidates for funding, may also find help from other schemes.
Think Beyond Ecommerce
Most of the startups invariably plunge into the ecommerce segment. However, it will pay better to look beyond ecommerce. The success of some regional ecommerce startups has inspired several entrepreneurs to set-up ecommerce startups. But finding a lucrative niche will be challenging in the increasingly cluttered ecommerce space.
In a highly digitalized country and with the pace of Internet and smart device penetration in the region is astounding. There are new untapped opportunities evolving in the ageing and digitalized country like Singapore and neighboring economies.
Beyond ecommerce, gaming, media, data analytics and entertainment, startups focusing on
- Travel, and
are also gaining traction among investors.
Startups that are successful in finding their niche, with sizeable commercial value, and caters to larger Asian market, are bound to succeed.
Look beyond the consumer segments.
The enterprise segment, especially in pharmaceutical, oil & gas and manufacturing, is still largely untapped. There are a whole lot of challenges in terms of
- Cyber security,
- Enterprise mobility,
- Logistics, and
- Resource management requiring solutions.
Solving these would eventually open up opportunities in regional enterprise markets as well.
Smart Nation is an initiative (Singapore) to manage the challenges thrown by ageing population and increasing urban density – the two major issues faced by governments globally – through smart deployment of technology.
Capitalize the cluster
New startup spaces have been launched facilitating easy access to a nurturing ground for the startups by bringing accelerators, incubators, mentors and service providers all under one roof.
Bringing entrepreneurs, investors, mentors and professional facilitators closer in the cluster, launchPad, a one-stop professional services centre managed by ACE.
BASH is an initiative driven by Infocomm Investments Pte Ltd (IIPL), the investment arm of Infocomm Development Authority of Singapore (IDA), to congregate the tech startup community.
The intensive startup environment promotes collaboration and partnership among the young entrepreneurs who also immensely benefit from the mentors and coaches. Besides cost savings from shared facilities such as labs and workshops, the community network is helpful in building business traction and market access. These are essential for the long-term success of the startups.
With the recent launch of Block 71 in the US startup paradise – San Francisco, expansion, collaboration and deal making with US counterparts will now become easier for Singapore startups.
JTC LaunchPad is affectionately nicknamed Block 71, the original block of startup space where many of the now successful local and foreign startups were born.
With a vision to replicate the success and spirit offshore, the name has stuck on. This is an outcome of the concerted effort by
- InfoComm Investment (IIPL),
- NUS (National University of Singapore) Enterprise, and
- SingTel Innov8
It is interesting to note that during the launch of Block 71 in San Francisco, IDA announced the extension of US$ 200 million fund to US tech startups, the fund was previously open to Singaporean startups only.
Such funding measures and linkages are being established to attract tech startups that have an interest in expanding into Asia through Singapore. This will add to the vibrancy of the local startup ecosystem. Local startups and SMEs can capitalize on such links to internationalize.
New schemes announced in the recent budget (Singapore) to help local companies internationalize would be helpful for the start-ups.
- The IE support scheme has been increased from 50% to 70% for all qualifying activities to internationalize.
- Double Tax Deduction provision has been enhanced to cover salaries of Singaporeans posted overseas therefore startups can claim tax deductions on qualifying expenses incurred in their internationalization efforts.
Talent shortage is a major challenge for startups. They cannot match the large companies or the multi-nationals in terms of training or benefits. The scramble for talent often remains a thorn in the path of progress for startups.
SkillsFuture scheme (Singapore) announcement will enable the startups to tap on the enlarged talent pool, by drawing students from ITE and Polytechnics under the Earn and Learn program.
Training new and young talent during their early stage will bring better payoffs in the later stage for the startups by building a strong and loyal talent pool alongside strong brand image.
Startups must also focus on talent augmentation through grooming because poor talent management would often result in derailment of the venture. Therefore, startups should focus on talent building and leverage schemes such as the SkillsFuture.
Singapore is an ideal place for startups to spring into the Asian and global markets. The startup ecosystem is teeming with the spirit of innovation and enterprising spirit. Experienced entrepreneurs, globally acclaimed accelerators, investors, have richly populated the ecosystem.
More importantly it has dedicated support from government agencies such as SPRING, IDA, etc. The academia and private enterprises are also pitching in. Entrepreneurship in Singapore is gaining grounds with increased access to fund and an enhanced support system.
Startups must be proactive in tapping the support system and engage the right service providers to manage their non-core activities such as bookkeeping, payroll management, immigration, and employment formalities.
International investors, entrepreneurs and techies are increasingly finding Singapore as the launch pad for their startups and invariably experience a smooth sail right from company formation to a commercially successful enterprise.
Come to Pathfinders for access to these opportunities.
Adapated from Singapore Business article