Singapore has emerged as an economic and technological powerhouse in recent years. This diminutive Southeast Asian country has built a business positive environment that encourages international and Singapore tech startups to open, branch out and spread their wings; giving birth to several powerful unicorns, like Grab, Lazada and Razer along the way. As these companies have flourished, a study by Startup Genome shows the country has overtaken Silicon Valley as the top location in the world for startup talent, which must come as a shock to the previous heart of the startup world. Technological innovation, government assistance and low startup costs have all made this an attractive commercial environment, and the rest of the world is beginning to notice.
For these reasons, in 2020, we expect to see more international startups opening offices in Singapore, which is considered the entry point to Southeast Asia’s population of more than 600 million. As the year rolls on, expect to see a rollicking startup marketplace where competition is stiff, and worlds can change overnight.
Fintech and sustainable deep tech
Two markets that are likely to flourish over the next few years in Singapore’s tech startup market are fintech and deep tech, particularly sustainable deep tech. The Monetary Authority of Singapore (MAS) has opened its banking sector to digital banking, which will transform the financial landscape in 2020. As 2019 closed, companies rushed to nab one of the limited digital banking licenses the government offered, giving a clear sign that the fintech industry is one to watch this year. Fintech startups, e-commerce firms and telecommunications companies all applied, including Singapore startup Grab and another homegrown unicorn, Sea. The entry to the market by these non-banking companies mirrors the rest of Southeast Asia as consumers move primarily to online banking.
Sustainable deep tech is another major trend to keep an eye on in Singapore’s startup market. This will concentrate on utilising deep technology to create cutting edge advancements in areas like alternative food sources and alternative agriculture. Pressing societal problems, such as the lack of food for our world’s burgeoning population and the capability to domestically supply food are on the Singaporean government’s agenda for the coming years.
Recent tech events like the Asia-Pacific Agri-Food Innovation Week and the SFFx SWITCH fintech festivals showcased innovations like alternative proteins, which ranged from plant-based meats to cell-based crustaceans. Other innovations in urban farming methods like robot-managed farms, drone bees, and circular economies were also highlighted. Grab has also jumped forcefully into this market, starting its first cloud kitchen in Singapore.
The fast and furious
The startup business can be mercurial, and the Singapore market has seen its share of battles, shake-ups, steep ascents, and sharp crashes. Grab and Gojek, two prosperous startups, are in an all-out duel to edge the other out of the competitive Southeast Asian market, which is a showdown bound to produce fireworks. Carousell and 701Search recently merged, creating another Singapore unicorn, while HonestBee was devastated with debts greater than $180 million USD, showing the startup game is not all unlimited money and unimpeded success. The market can be fickle and unforgiving, so startups need to be cautious before making any strategic shifts. As Singapore’s startup markets swell with competitors and new entrants in 2020, keep an eye out for tactical moves like acquisitions, mergers and rapid market exits.
What does this mean for Singapore?
In 2020, we expect to see Singapore’s tech startup scene blow up with endeavours from Southeast Asia and around the globe. As Singapore’s profile as a fertile breeding ground for startup success grows, many startups will open offices in Singapore, creating many jobs; including positions in tech engineering, product development and marketing. The eCommerce platform Shopee opened its Singapore offices in the autumn of 2019, creating thousands of employment opportunities for local and international workers. And this year Razer, Grab and Carousell are all opening their own home base offices in this plentiful business zone. Another Singapore tech startup, Bigo, is hiring 500 tech and AI workers in the coming years, guaranteeing high-quality positions for well-trained workers.
Singapore’s startup ecosystem should continue to be a hotbed of innovation, employment opportunities and strategic business deals in 2020. As the population of Southeast Asia gains a larger middle class with more spending power and greater digital penetration, the ASEAN market will continue to expand, proving that the US and European markets are no longer the nexus of the world economy. Singapore will be at the epicentre of a global rush toward the future as our world merges with the digital. As tech startups focus on creating smart cities and using deep technologies to improve our food consumption and energy efficiency, there will be an opportunity for Singapore’s tech startups to gain traction in a still young market. If you’re in the startup world, Singapore in 2020 is the market of the future.