The Singapore start-up ecosystem – A bird's eye view

Contrary to the belief that Silicon Valley was successful because of the absence of government interference, Singapore's start-up ecosystem has been proactively created by government.

The results speak for themselves. There have been recent cases of successful exits, such as the video-streaming site Viki. There are also examples such as online supermarket RedMart, which enjoys continued investor interest and rapid revenue growth of 20 to 30 per cent per month.

Viki was acquired by Rakuten for US$200 million in September 2013. This was big news for Singapore entrepreneurs. Since most tech start-ups are founded with the end goal of exiting, Viki's journey was seen as a heartening tale. It grew from a student project by the founders when they were at Stanford and Harvard, to a website featuring two billion video streams and crowd sourced subtitles in 25 languages, and finally to a successful sale to the Japanese e-commerce giant.

Series A-funded online grocery store RedMart, which is just over two years old, managed to raise US$5 million on the angel investment crowd funding site AngelList. This was only months after RedMart had completed a bridge round of US$5.4 million in funding in January, from investors including Facebook co-founder Eduardo Saverin. RedMart's notable investor line-up also includes former Skype head of engineering Toivo Annus.

These start-ups are the product of around a decade's effort in making creativity and entrepreneurship part of the nation-building strategy since a 2003 economic review committee white paper.  For every common obstacle a start-up could face, Singapore offers a solution.

Start-ups need capital, and Singapore's government agencies provide a host of funding schemes. Major funding is offered by the Infocomm Development Authority (IDA), the National Research Foundation, A*STAR (Agency for Science Technology) , the SME development agency SPRING, and the Media Development Authority (MDA). One of the largest venture capital funds in town is Innov8, a wholly-owned subsidiary of SingTel, which is a subsidiary of Temasek Holdings, the investment arm of the Singapore government. There are so many funding schemes that the term “grantrepreneurs” is often mentioned partly as a joke and partly as a cautionary scenario where start-ups could not survive without government funding.