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How to find start-up investors for your new business

Dr Biz • Dec 15, 2020

Singapore has one of the healthiest, most active communities of start-up investors in the world. With a reputation as leaders in innovation, start-ups in the city-state consistently attract large levels of funding from investors at home and abroad, with many venture capital firms and angel investor networks queuing up to provide start-up investment.

In-fact, according to a report published by Enterprise Singapore (ESG) last year, start-up investors poured S$13.8 billion into new businesses in Singapore in the first quarters of 2019, up 36% compared to the previous year. In the early stage segment funding also doubled to S$886.1 million across more than 300 deals while growth stage funding grew 33%.

Hot sectors for start-up investors

Areas that attract lots of start-up investors include digital technology, which last year accounted for a staggering 93.2% of total start-up investments, with the number of deals climbing to 280 from 145 in Q1-3 2018. While Grab’s huge $6.6 billion funding round certainly made an impact on these figures, they nonetheless reflect a growing appetite for investment into companies seizing opportunities in the new online marketplace.

So-called “deep technology” is another area gaining significant traction in the start-up funding market, with ESG noting last year that investment into deep-tech grew by 25% to reach S$416.4 million. The specific sectors to gain funding were advanced manufacturing, urban solutions and sustainability and healthcare and biomedical sciences.

Deep technology a growing trend

Interest in deep tech has grown in 2020, not least in the healthcare and biomedical segment thanks to the Covid-19 pandemic, which has prompted the greatest global race for a vaccine ever seen. To support this sector, ESG’s investment arm Seeds Capital this month launched an initiative calling for private partners to help it plough S$150 million into early-stage, deep tech start-ups in the three key sectors highlighted above.

The initiative will use funds from the Startup SG Equity Scheme, which allows the government to invest in funds or third-parties that are funding eligible startup sectors. The deep tech sector is gaining support as the high risk nature of their businesses mean private investors often shy away. Through the new scheme Seeds will match each joint investment dollar between S$500,000 and S$4 million, or up to 70% of up to an S$8 million investment in deep tech start-ups.

Innovation attracts investment

It has, then, perhaps never been such a good time to be looking for funding from a start-up investor in Singapore - not least if you are an innovative company providing new solutions. The fintech sector, for example, continues to thrive, with investments reaching S$371 million in the second quarter of this year, up 400% from the S$68 million recorded between January and March.

While investment in fintech companies is still down compared to 2019 due to Covid-19, Singapore is much less volatile than other countries in Asia, with funding across the region in-fact falling to S$3.2 billion in Q2 from S$4.18 billion in Q1. More than 40% of South-East Asia’s fintech firms are based in Singapore thanks to strong government support, with the Monetary Authority of Singapore pledging S$250 million to fintech just this year.

Startup resources and funding options

Resources abound in Singapore for companies seeking start-up investors. With all the government support available, the first place for any new company to start looking is Startup Singapore. Launched in 2017, this is a great resource hub that aims to create a place where entrepreneurs, investors and mentors can come together to support each other. To date, there are 3,764 startups, 522 investors and 216 incubators and accelerators registered on the network.

Through the website you can find details of all the funding options available to start-ups in Singapore, including the Startup SG Equity scheme mentioned above, as well as the Startup SG founder program, which provides funding and business guidance for first-time entrepreneurs. As a branch of Enterprise Singapore, Startup SG is supported by over 100 government agencies, key industry players and experts all with significant sector-specific experience.

Network, network, network

Small businesses that sign up to the Startup SG Network will also have access to a wide database of companies and people to connect with to find opportunities. Once connected, you will be able to see their latest activity or message them directly. You can also expand your network through recommendations generated by the SG Singapore machine learning system and profile your company on a global stage. Startups looking to raise funds can also upload pitch materials and present to investors through the platform.

Singapore also boasts one of the world’s strongest networks of angel investors, many of which are happy to receive pitches directly. You can find out more about that in a previous Dr Biz blog. Moreover, networking events are plentiful, including Deal Friday, an investor matchmaking program in the lead-up to the Singapore Fintech Festival and Switch 2020 - which is behind held between 7 and 11 December 2020. So don’t delay: now is a great time to find a start-up investor in Singapore.

At Dr Biz, we provide tailored and comprehensive solutions for our client's business needs. From incorporation to accountancy, tax and payroll, to professional advisory services, we help businesses in Singapore assess potential risks and become more cost effective and efficient.

To find out more, please feel free to contact us.

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